ECB’s Muller: To weigh APP boost when PEPP comes to an end

The European Central Bank (ECB) Governing Council member Madis Muller is making some comments on ramping up the central bank’s regular asset purchases once they scale back the Pandemic Emergency Purchase Program (PEPP).

Although he added that any such boost is uncertain, at the moment.

Key quotes

“I realize that it would be a problem if there is a very sharp cliff effect at the end of the pandemic emergency purchase program.”

“One option would be to expand the pre-crisis plan above the current 20 billion euros per month.”

A potential increase in the older quantitative easing program is “part of the discussion we will have on how to phase out PEPP and what it would mean for asset purchases going forward.”

“And of course, the decision will depend on market conditions next spring and the economic outlook at that point.”

“Given the recovery that we’re seeing in the economy, also the outlook for inflation and most importantly the extremely favorable financing conditions that we continue to have in the euro area, we should be able to end PEPP in March as it has been communicated and as it has been the original plan.”

“If you ask what is the most likely outcome then to me personally, this is the base case.”