• Subdued growth not proof of restrictive policy.
  • Can't say with confidence policy is restrictive.
  • The nature of the inflation process is likely to have changed lastingly.
  • We are transitioning from a global "savings glut" towards a global "bond glut".
  • First, a higher R* calls for careful monitoring of when monetary policy ceases to be restrictive.
  • There is still ample excess liquidity.
  • The natural rate of interest in the Euro Area has increased appreciably over the past two years.
  • If QT leads to a scarcity of reserves, it may cause the overall convenience yield to rise and hence equilibrium rates to fall.
  • It is becoming increasingly unlikely that current financing conditions are materially holding back consumption and investment.
ECB's Schnabel
Source: Forex Live