RFEU - ECB: New Inflation Target Old Tools

• In a surprisingly early conclusion of its monetary policy strategy review, the European Central Bank (ECB) rolled out several changes that will likely keep monetary policy easier for longer.
• The good news: The ECB adopted an easy-to-understand, symmetric (i.e., negative and positive deviations of inflation are equally undesirable) 2% inflation target.
• The not so good news: The ECB did little to explain how it will achieve 2% inflation, other than committing to “especially forceful or persistent monetary policy measures to avoid negative deviations from the inflation target”.

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