Last month, policymakers at the European Central Bank debated a larger reduction in asset purchases, with some even arguing that markets had already prepared for the end of emergency support, according to accounts from their September 9 meeting released on Thursday.
“It was argued that a symmetric application of the (Pandemic Emergency Purchase Programme) framework would call for a more substantial reduction in the pace of purchases,” the ECB said adding that “From this perspective, a pace of purchases similar to the level prevailing at the beginning of the year would be appropriate.”
Finally, officials decided to "moderately" cut asset purchases, while emphasizing that this was not "tapering" because weak price pressures required continued support.
Additional Comments From ECB Accounts
All members agreed that, in accordance with the framework set in December 2020, consistently favorable financing circumstances, along with a somewhat better medium-term inflation forecast, would enable the governing council to modestly scale down its monetary policy.
In terms of the inflation prognosis, a notable improvement throughout the course of the year was noted.
It was proposed that more information on the reasoning behind the app, the PEPP, and associated policy decisions should be included in public communications. Even without the PEPP, the overall monetary policy stance remained highly accommodating.
The short-run rise in inflation was mostly caused by transient causes that would dissipate in the longer term and would not need policy tightening.
Wage pressures remained low and diverse.