ECB: Trade conflicts to have an adverse impact on activity – Deutsche Bank

Analysts at Deutsche Bank, note that the ECB minutes indicated that “…the broadly agreed conclusion was that the evidence for a sustained rise in inflation toward levels consistent with the Governing council’s inflation aim was still not sufficient”.

Key Quotes

“Further, “there was widespread concern that the risk of trade conflicts, which could be expected to have an adverse impact on activity for all countries involved, had increased”. In terms of the recent softening in economic indicators, the ECB’s Coeure didn’t seem to be too concerned as he noted “the possibility of larger than estimated slack does not mean that monetary policy will have to remain unchanged”.”

“Elsewhere on inflation, the ECB’s Weidmann noted the price-stability goal must not be weakened and that he “rejects any proposal to let inflation overshoot the 2% threshold for some time or to raise the inflation goal”.”