The European Central Bank (ECB) unveiled a newly reformulated, more ambitious inflation target. Without new mechanisms to achieve it, however, we believe inflation will remain stubbornly stuck well below 2%.

As European inflation and growth remain subdued, the European Central Bank expanded its monetary support. The central bank, however, is now focusing more on the region’s financing, rather than financial, conditions.

The conditions for a relatively quick and robust rebound rest on the success in containing the virus within a reasonable horizon, and a well-calibrated economic policy response.

The European Central Bank (ECB) didn’t follow other major central banks and refrained from cutting interest rates in response to the coronavirus outbreak. This signals a shift in the central bank’s preferred policy tools – read more.

The ECB’s next meeting will be Christine Lagarde’s first real test as new ECB president. This marks an end to a honeymoon-like period in which she was planning to focus on the central bank’s strategic review.