European Central Bank officials have given up on the idea of a swift economic rebound from the pandemic and are ready to add stimulus again next month if new information suggests existing efforts aren’t enough.
Policymakers agreed at their meeting on April 30 that a “V-shaped recovery could probably already be ruled out at this stage”,
However, their emergency asset purchases prevented the likelihood of a self-reinforcing downward spiral, according to an account of the virtual discussion.
“At the June meeting, more information would be available, including new Eurosystem staff macroeconomic projections,” the account stated.
“The Governing Council would have to stand ready to adjust the Pandemic Emergency Purchase Program and potentially other instruments if it saw that the scale of the stimulus was falling short of what was needed.”
“The minutes from the European Central Bank’s last meeting are unusually clear.
“Most importantly, they indicate its bond-buying programme is likely to be increased in June.
“In addition, in thinly veiled language, the account also removes any doubt about the Governing Council’s determination to keep Italian government bond yields low.”