20 Feb 2015
ECB Minutes: More transparency, but little ‘new’ information – Rabobank
FXStreet (Barcelona) - Elwin de Groot, Senior Eurozone Strategist at Rabobank highlights the key points from ECB’s Monetary Policy Accounts, noting that the minutes succeded to provide more transparency but failed to provide any new information.
Key Quotes
“The Account of the monetary policy meeting by the ECB Governing Council, held on 21-22 January, provided relatively little ground-breaking information.”
“As could be expected, the account is relatively comprehensive with regard to the discussion about financial market developments, the outlook for the economy and risks to price stability. Arguably, these topics are relatively insensitive.”
“Nonetheless, they could help the public in gaining a better understanding of the ECB’s monetary policy, a key objective of the ECB.”
"The 18-page document (clearly lengthier than expected) also provides more colour on the rationale for the Governing Council’s decisions. For example, the document notes that there was a “broadly shared view that they would maintain their assessment that, on balance, the risks surrounding the euro area growth outlook were on the downside, while downside risks had diminished as a result of the fall in oil prices.” On this latter point, however, it was said that the “[GC] was not in a comfortable position to “look through” price shocks, even when they originated on the supply side”.”
“Moreover, it was “widely acknowledged that the risk of second-round effects needed to be considered very seriously.” Clearly, concerns about low inflation becoming more protracted were a key reason behind the GC’s decision to announce QE.”
Key Quotes
“The Account of the monetary policy meeting by the ECB Governing Council, held on 21-22 January, provided relatively little ground-breaking information.”
“As could be expected, the account is relatively comprehensive with regard to the discussion about financial market developments, the outlook for the economy and risks to price stability. Arguably, these topics are relatively insensitive.”
“Nonetheless, they could help the public in gaining a better understanding of the ECB’s monetary policy, a key objective of the ECB.”
"The 18-page document (clearly lengthier than expected) also provides more colour on the rationale for the Governing Council’s decisions. For example, the document notes that there was a “broadly shared view that they would maintain their assessment that, on balance, the risks surrounding the euro area growth outlook were on the downside, while downside risks had diminished as a result of the fall in oil prices.” On this latter point, however, it was said that the “[GC] was not in a comfortable position to “look through” price shocks, even when they originated on the supply side”.”
“Moreover, it was “widely acknowledged that the risk of second-round effects needed to be considered very seriously.” Clearly, concerns about low inflation becoming more protracted were a key reason behind the GC’s decision to announce QE.”