ECB Sticking to PEPP as its Main Gun - Forex News by FX Leaders
The ECB PEPP programme is working

ECB Sticking to PEPP as its Main Gun

Posted Thursday, June 11, 2020 by
Skerdian Meta • 1 min read

The European Central Bank started the PEPP programme in March to help the Eurozone economies during the lockdown and after it, since the effects of the economic shutdown will be felt for a long time. It is helping somewhat, but it wouldn’t do much if the lockdown continued.

ECB economist Philip Lane made some comments earlier today, saying that they will stick to the PEPP, on top of some other action. Below are his comments:

  • We are ready to do everything to restart the economy
  • ECB acted to counter substantial negative inflation shock
  • PEPP is a temporary tool
  • Inflation is still far from our target, QE will still be needed
  • ECB stands ready to adjust all tools – including rates – if needed
  • But PEPP is the main focus currently

Nothing that really stands out too much as these are similar remarks to what have been reiterated by ECB policymakers over the past few weeks as well. Despite all their talk of PEPP being ‘temporary’, it is going to be interesting to see if they can handle the tantrum/fallout when they start to look to remove it in the future. For now, the programme is extended to June next year but it would surprise nobody to see if go all the way through to 2022 at the very least in my view.

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About the author

Skerdian Meta // Lead Analyst
Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
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