In doing so, it is dampening expectations for the meeting of the Governing Council that will take place in mid-December. For this, it was expected that the ECB would determine whether and when it would let its emergency program PEPP expire and make the first hints about a possible interest rate turnaround, as the US Federal Reserve has already done.
She is confident that the EUR 1.85 trillion emergency bond purchase program PEPP could end in March. But even if there will be no more acquisitions, expiring papers will continue to be replaced as part of the program, said the Frenchwoman in an interview with the Reuters news agency.
Apparently, many Governing Councils shy away from determining at an early stage how things should go on after the end of PEPP with bond purchases, for example through the smaller APP program. In the opinion of its Vice President Luis de Guindos, however, the ECB will continue to use bond purchases to prop up the economy even after the PEPP has come to an end.
Lagarde also affirmed that an interest rate hike in the coming year was very unlikely. But if the conditions for tightening are met, the central bank will be ready to act without hesitation.
The ECB has practically fixed low interest rates in its outlook for a long time. It wants to keep it at the current level or an even lower level until it can be seen that inflation has reached two percent and is also stuck there. The key rate has been 0.0 percent since March 2016.
Source: Nachrichten
