ECB's Lane: Not experiencing de-anchoring of medium-term inflation expectations

The evidence suggests that the euro area is not experiencing a broad-based de-anchoring of medium-term inflation expectations, European Central Bank (ECB) Chief Economist Philip Lane said on Tuesday, as reported by Reuters.

Additional takeaways

"If we observe that transmission is weaker or slower than expected, this would require a further tightening of the monetary policy stance."

"If we observe that transmission is stronger or faster than expected, this would require a less-tight monetary policy stance."

"Outstanding funds in the ECB’s targeted lending programme (TLTROs) are still dampening the increase in bank funding costs."

"We remain attentive to the spread between different money market rates as well as collateral scarcity concerns."

"Further progress in bringing inflation towards our aim can be attained by ensuring the appropriate level of slack in the economy, provided inflation expectations remain sufficiently well-anchored."

Market reaction

The EUR/USD pair paid little to no attention to these comments and was last seen rising 0.3% on the day at 0.9730.