ECB’s Wunsch: Households savings are enough to finance 3-5 years of strong consumption

Comments from Wunsch

  • Household savings in 2020 and the start of 2021 are enough to finance private consumption growth above 2019 level for 3-5 years
  • Surprised by the resilience of economies
  • ECB is fine with financing conditions as they are
  • If economy improves strongly it will have to mean some tightening at some point
  • If economy clearly deteriorates, ECB could extend PEPP beyond March 2022

The line about ‘clearly deteriorates’ is an important bit of communication. It highlights that the ECB has reached the point where the next move will be tightening in some small way.

Invest in yourself. See our forex education hub. Source

Leave a Reply

Your email address will not be published. Required fields are marked *