The ECB previously chose to go below inflation, but nearly 2%
The European Central Bank revised its own inflation target to 2%, sometimes confirming its willingness to surpass this level.
The announcement gives the central bank chief the ability to keep interest rates down for a long period of time.
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The ECB had previously chosen to go below inflation but remained close to 2%, so this change allows us to present more robust stimulus measurements when needed.
The revised target is defined as “symmetric”. This means that being below 2% is just as undesirable as being above the level.
“We are pleased to announce that we are pleased to announce that we are pleased to announce that we are pleased to announce that we are pleased to announce that we are pleased to announce that we are offering a range of services and services. “The new strategy is a strong foundation that will guide us in the implementation of monetary policy over the next few years.”
“If the economy operates near the lower limit of nominal interest rates, particularly strong or sustained monetary policy measures are needed to avoid denials from inflation targets becoming entrenched,” the ECB said. “This could also mean a temporary period where inflation is moderately above the target.”
Commenting on the ECB strategy review, Hesús Cabra Guisasola, associate of ValidUS risk management, said, “The ECB seeks to reflect the Fed’s monetary policy by up or down this level, as needed, by dropping the 2% inflation target. I’m here.”
“Nevertheless, this announcement is softer than the Fed’s average inflation target, as the Euro area’s HICP inflation average has been well below this target for the past decade.”
“Today, this decision will provide further support for the ECB to continue its ultra-dubish tone and support the Eurozone with favorable financing terms.”
“The mute response in the Forex market after the announcement. However, the euro is currently trying to recover some of its losses against the dollar after falling below the support level of $1.18 yesterday.”
Eurozone inflation fell in June amid declining oil prices, data released last month. EU-wide inflation fell 0.1% from 1.9% between May and June.
