Research Briefing
| Dec 17, 2021
European Central Bank tapers PEPP purchases but retains flexibility
The ECB took significant steps to tighten its highly accommodative policy stance over the course of 2022 on the back of upwardly revised growth and inflation projections.
What you will learn:
- Net asset purchases under the PEPP will slow in Q1 and end in March.
- Net asset purchases under the APP will temporarily rise to €40bn per month in Q2 and €30bn in Q3 before returning to €20bn thereafter.
- The bar to ending QE net purchases seems lower now as the temporary top-up of the APP only lasts six months and the new headline and core inflation forecasts are close to target at 1.8% in 2024.
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