ECB reinforces need for a nimble, data dependent monetary policy
The Peninsula
Doha, Qatar: Every summer, the European Central Bank (ECB) organizes a sought after monetary policy forum in Sintra, Portugal. The event is one of the...
Doha, Qatar: Every summer, the European Central Bank (ECB) organizes a sought-after monetary policy forum in Sintra, Portugal. The event is one of the most important central banking conferences in the world, bringing together top economists, bankers, market participants, academics and policy makers to discuss relevant macro issues, QNB said in its economic commentary.
Since its inception in 2015, the forum has garnered significant attention due to the impactful speeches delivered by senior policymakers, rivalling the Jackson Hole conference in its appeal to investors.
As an ECB-led event, it has always held prominence on investors’ calendars. Indeed, this year’s meeting was particularly relevant, as the ECB had just started a new phase of its monetary policy cycle last month, when policy rates were cut for the first time in five years. This came after a “holding” period of nine months, which followed the most aggressive tightening in the history of the ECB, when rates were hiked by 425 basis points (bps) as a response to the post-pandemic inflationary shock.
However, despite the beginning of the easing cycle, there is still significant uncertainty about the pace of rate cuts going further, as well as the “terminal rate” or “neutral rate” at which the nominal policy rate should stabilize.
In the introductory speech of the Sintra forum, Christine Lagarde, the president of the ECB, expressed well what is behind the hesitation to take a more aggressive path towards a faster monetary policy easing.