Moments ago, ECB president Christine Lagarde confirmed again that the European Central Bank remains generally helpless to boost growth in a world in which it unleashed negative rates, sending European banks to all time lows last week, and where the second wave of Covid cases means the ECB has no visibility into the future:
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“Businesses are facing difficulties, people are losing their jobs, and prospects about the future remain uncertain,” European Central Bank President Christine Lagarde says in European Parliament, adding that the ECB “will carefully assess all incoming information, including developments in the exchange rate, with regard to its implications for the medium-term inflation outlook”
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“[The ECB] continues to stand ready to adjust all of its instruments, as appropriate, to ensure that inflation moves towards its aim in a sustained manner, in line with its commitment to symmetry”
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Strength of the recovery remains “highly dependent on the evolution of the COVID-19 pandemic and the success of containment policies. The public health crisis will continue to weigh on economic activity and poses downside risks to the economic outlook”
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Declines in energy prices, stronger euro, temporary reduction in the value- added tax rate in Germany will weigh on inflation in the coming months
What is more notable is that earlier today, the ECB lobbed another trial balloon via its favorite media outlet, Reuters, in which we read that a new mutiny may be forming within the ECB, where the doves find Lagarde not dovish enough, while the hawks demand a prompt retraction of the massive liquidity stimulus that has been...