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ECB minutes say officials discussed removing easing bias

Published 07/06/2017, 07:38 AM
© Reuters.  ECB minutes say officials discussed removing easing bias

Investing.com - Officials at the European Central Bank discussed removing the easing bias, but decided that its was prudent that it remained, the minutes of its June meeting showed on Thursday.

The ECB Governing Council judged that it was important to stress the stronger momentum of the euro area recovery, while emphasizing that inflation remained subdued.

Officials were concerned that even "small and incremental" changes to forward guidance would spook markets.

“It was necessary to avoid signals that could trigger a premature tightening of financial conditions,” the minutes said.

The minutes come after ECB President Mario Draghi appeared to open the door to policy adjustments in comments last week, fueling speculation the bank could start to scale back its stimulus program as soon as September.

Draghi said factors weighing on inflation in the euro area were mainly temporary, adding that the bank could look through them.

He also said the ECB sees growth that is above trend and well distributed across the euro area, but reiterated that “a considerable degree” of stimulus is still needed in the euro zone, and that the ECB must be “prudent” in how it unwinds it.

ECB sources subsequently said the markets had over interpreted Draghi’s remarks.

Earlier Thursday, ECB Chief Economist Peter Praet said the bank needs to be patient and maintain a steady hand in policy as inflation is still far below its target.

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