ECB minutes add nothing new, but set up an interesting December

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ECB minutes from Oct 27-28

  • inflation expected to be ‘hump shaped’.
  • All members agreed to continue PEPP purchases at a moderately lower pace during Q4 (2021)
  • These purchases could be expected to end in 2022
  • Market expectations for rates were hard to reconcile with the ECB’s own projections

So, since the minutes of the October meeting there is the looming prospect of restrictive measures in Europe to contain another COVID surge. This makes for a very interesting December meeting and certainly muddies the water in terms of what the ECB will do. Nothing to see here from the minutes, but the exit policy of the ECB from the PEPP program is still in the dark, even if the PEPP purchases do end March 2022

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