ECB’s Lane: We see some signs of an initial recovery

The European Central Bank (ECB) chief economist, Philip Lane, in a prepared speech about the central bank's monetary policy response to the coronavirus pandemic, said that we see some signs of initial recovery.

Key quotes:

• Evidence tilts the balance towards asset purchases rather than rate cuts as the more efficient tool in current circumstances.
• Anchoring the risk-free yield curve at exceptionally low levels is necessary but not sufficient condition for ensuring that the overall stance of monetary policy is appropriate.
• Plausible that it will take a sustained period of improving economic and public health conditions before the confidence is fully operative.
• The outcome of negotiations about the EU recovery fund will be an important factor in determining the future path for the Euro area economy.
• Will be unusually difficult for several reasons to extract signals about the medium-term prospects for the economy and the inflation path.