Volker Wieland calls for clear exit strategy from ECB (Tagesschau.de)

This week, the Federal Reserve (Fed) and the European Central Bank (ECB) will decide on their monetary policy. Inflation had been rising steadily in both the U.S. and the euro area. Volker Wieland expects that the Fed will now take countermeasures. In an interview with Tagesschau.de, he called for a clear exit strategy from the ECB.

"The Fed will probably decide to exit from loose monetary policy sooner than previously expected," he said. The central bank had already announced in November that it would reduce the volume of bond purchases: from the current $120 billion per month, the purchases are to be lowered by $15 billion each month, thus ending in mid-June 2022.According to Wieland, "everything is going a little slower" at the ECB. He said inflation in the euro area has also risen above target, but not as much as in the United States. "So far, the ECB staff expects inflation to fall back below the 2 percent target in 2022 and 2023." He called for a clear exit strategy from the ECB's loose monetary policy. According to Wieland, the economic recovery and the rise in inflation rates argue for "slowly but surely initiating" the end of loose monetary policy. Net purchases from the emergency PEPP purchase program should not continue beyond March, he said.Wieland believes the Fed is much more transparent in its communication. He recommends the ECB do the same. "The easiest thing to do, similar to other central banks, would be to publish the future interest rate path."  

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