ECB’s Holzmann Says Right to Assume Lagarde Signaled Stimulus

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The Austrian governor, typically among the most-hawkish of policy makers, also said new policy instruments may be developed by then to complement the existing bond-buying and bank-lending programs. He said he doesn’t see much point in an interest-rate cut.

“We put a lot of money on the table, but inflation hardly moved so there is rising recognition that quantity by itself doesn’t do the trick,” Holzmann said in a Bloomberg Television interview. “We have to look more into the structure and to see how this could be fine-tuned.”

With coronavirus infections surging and governments imposing new lockdowns, Lagarde said Thursday that policy makers agreed to “recalibrate” their monetary support to help counter the economic damage. The euro zone’s strong summer rebound — reflected in data on Friday — looks like turning into a fourth-quarter contraction and a possible double-dip recession.

Holzmann played down the risk of a double-dip, and pushed back against Lagarde’s suggestion that Governing Council could act even before its Dec. 10 meeting if the situation deteriorates.

“What we have decided is to make preparations, to go through our portfolio and see in what area we need to recalibrate to be ready for December, but the decision will be based on December data,” he said. “It’s very clear we’ll use December projections and the information in December to make our decisions.”