In an interview with "Börsen-Zeitung", Prof. Volker Wieland advocated slowing down the European Central Bank's (ECB) emergency PEPP bond purchases. "If it becomes apparent that economic activity will soon exceed pre-crisis levels again - and that is where we are likely to be - the ECB should slow down bond purchases under the pandemic emergency program and outline a medium-term exit path."
In his view, it would also be appropriate to respond to the improved inflation outlook with reference to monetary policy rules. According to Wieland, this is not necessarily a temporary phenomenon. "So if nominal interest rates do not follow suit, the rise in inflation will not remain temporary either." In any case, the ECB should explain the longer-term development of the central bank balance sheet, he said.
Börsen-Zeitung: "Politischer Druck ist ein Risiko bei der Inflation" (€)
Börsen-Zeitung: "US-Inflation heizt Fed-Debatte an"