European Central Bank
Frankfurt: European Central Bank policymakers meeting on Thursday were in broad agreement their next step would be to cut bond purchases, with four options under consideration, two sources with direct knowledge of the discussion said.
Possibilities discussed by the ECB included - but are not limited to - cutting monthly assets buys from €60bn now to €40bn a month or €20bn from the start of next year, with extension options including 6 months or 9 months, said the sources, who asked not to be named.
Any decision, likely come in October, should also be backed by a broad consensus, the sources said, with one suggesting a compromise could be found for setting monthly purchases somewhere between €20bn and €40bn.
This showed that policymakers are keen to avoid the repeat of the public discord that has marred the history of the quantitative easing program since its 2015 launch, with decisions criticized by national central banks hostile to the policy and even by some within the ECB’s own Executive Board.
Indeed, Germany’s central bank governor Jens Weidmann, who has long called for the ECB to step off the QE pedal, struck a conciliatory tone yesterday.
“The increase in inflation is sluggish and the uncertainty about the future inflation path is quite large,” Weidmann, who sits on the ECB’s Governing Council, said.
