The European Central Bank is aiming to stop bond yields from rising before the pandemic-hit euro zone economy is ready to digest higher borrowing costs, the ECB’s chief economist Philip Lane said in an interview published on Tuesday.
The ECB’s decided last week to accelerate bond purchases for the next three months to counter a rise in bond yields, which policymakers deem at least partly unwarranted for an economy still struggling under the COVID-19 pandemic.
With the ECB in the middle of a strategic review, Lane added there was a “strong logic” in announcing that inflation would be allowed to overshoot the ECB’s 2% target given that it had lagged it for so long, as the U.S. Federal Reserve has done. But he cautioned there were “other options that may also be successful in anchoring inflation expectations”.
ECB wants to keep yields in check while economy heals, Lane tells FT, Reuters, Mar 16
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