Mr. Coeure doesn´t have a “heart”

But Mr, Coeure should if he were guided by the sound of his name!

Coeure told a journalist club on Monday night that the ECB was ready to act, but that the euro zone was not edging towards a dangerous fall in prices.

“Inflation prospects are consistent with our objective, so I don’t see need to use spectacular measures, such as U.S.-style large-scale asset purchases,” Coeure said, adding that the ECB can buy government bonds as long as it does not do so for the purpose of financing governments.

But the Frenchman added that the ECB would keep a close eye on price developments and would be ready to act, if needed. At the same time, there was no evidence of deflation taking root.[in Greece it´s down to -2.9%!)

“We have not even taken the first step towards deflation, that would be the de-anchoring of inflation expectations.” [Old Japan, here I come!]

Commenting further on the inflation outlook he said that inflation would accelerate gradually to the ECB’s target.

“Staff forecasts say the inflation will gradually recover and will come back towards 2 percent in 2015 and presumably back to 2 percent at some later point, but not so long after the expiration of the forecasts.”

Earlier this month, the ECB released new staff economic projections that forecast inflation of 1.3 percent for 2015. [Where is he getting his information?]

To show how “heartless” he is:

Turning to the ECB’s forward guidance, Coeure said this was based solely on the inflation outlook and the ECB would not refrain from hiking rates if inflation was seen rising above target. The euro zone central bank broke in July with its tradition of never pre committing, stating that it expected to keep interest rates low for an extended period of time.

“We are not on that line, not at all, we will not change our reaction function,” Coeure said. [He draws the gun fast with his “right hand” but is terribly slow with “his left hand”!]

HT Patricia Stefani

3 thoughts on “Mr. Coeure doesn´t have a “heart”

  1. Right, it is all about inflation. The purpose of a central bank is not to help prosperity, it is about a slavish genuflection to price stability…now, right-wingers (John Cochrane, for example) are saying “What is stable about 2 percent? Zero would be better.”

    After that, I suppose, deflation will be the next standard.

  2. Pingback: ECB: Mr. Coeure doesn´t have a “heart” - The Corner The Corner

  3. Pingback: TheMoneyIllusion » Is the ECB making “rookie mistakes?”

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