The European Central Bank (ECB) announced “slowing down“ it’s asset purchase program under Pandemic Emergency Purchase Program (PEPP). Some estimates suggest that PEPP bond-buying program could slow down to a range between 60 billion euros to 70 billion euros from roughly 80 billion euros a month.
The ECB however to maintain 0.00% on main refinancing operations, 0.25% on marginal lending facility and -0.05% on deposit facility. The governing council expects to maintain this rate until inflation target of 2% has been achieved. The ECB also added it might experience transitory period where the inflation is “moderately” over the target level.
In a Twitter post, the ECB posted inflation forecast where inflation in 2021 to see 2.2% which is above the target level and slowing down to 1.5% end of 2023.
ECB’s real GDP forecast remains 5.0% for 2021 with 4.36% and 2.1% for 2022 and 2023 respectively. Earlier Euro Zone inflation for August topped decades high of 3% YoY.