The ECB introductory statement is more and more focused on “underlying inflation” (see the chart with the number of mentions of “underlying inflation” or “core inflation”) and about how the “gradual resorption of slack” will make it rise. Now, the ECB is explicitly linking the evolution of inflation to the improvement on the labor market. The need of a “very substantial degree of monetary accommodation” is now directly linked to “underlying inflation”. In a sense, the ECB is now closer to what the Fed did over the past two or three years. Note also that the introductory statement states that risks to the outlook are related to “global factors” and not to domestic factors.
In a sense, the ECB wording is “normalizing”.
DRUT Bastien , Fixed Income and FX Strategy
