The members of the governing board of the European Central Bank (ECB) agree that a broad degree of monetary stimulus remains essential, minutes from the central bank’s latest monetary policy meeting showed on Thursday. The euro had no reaction to the release.
“In view of the strong contraction of the Eurozone economy, it was considered important that the governing council emphasized the need for continued and ambitious fiscal policies to support the recovery,” the minutes read.
At the last meeting it was confirmed that the governing council it had to declare that it was still willing to adjust all its instruments, including the rate of the deposit facility, to ensure that inflation moved towards its target in a sustained manner. At the same time, they clarified that it must reiterate its vigilance regarding the evolution of the exchange rate and its implications for the inflation outlook. Officials opined that favorable financing conditions should prevail for some time.
About the movements in the bond marketIt follows from the minutes that not every increase in nominal returns should be interpreted as an unjustified adjustment. They add that “nominal returns were not an appropriate benchmark to assess whether financing conditions remained favorable.”
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