ECB's Lagarde: 'The lady is for calibrating' asset purchases

ECB's Lagarde: 'The lady is for calibrating' asset purchases

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00:00
we will see when we have the data and the numbers because we are really data dependent and we try to assess uh the situation based on figures on data on facts we don't like to you know operate on the basis of hearsay assumption here prices increases there what is true though is that we have been revising upward many of our projections in the last three quarters so things have picked up
00:30
faster and that is true for growth that is true for inflation and that is true for employment so in a way it's all it's a package of good news because it means that our economies are responding jobs are being created again the service activities which were completely done for so long are now you know coming back in full swing so all that is good but of course it induces frictions and uh you
01:00
know those bottlenecks of those supply chains that have been uh disrupted because of the of the pandemic and were you know reinitiating the machine is is taking time but in the main you know all of that we hope will last when it comes to growth so that activity continues we hope will last when it comes to jobs so that employment continues and unemployment goes down and for prices we think that there will be a return to much
01:32
more stability in the year to come because many of the causes of higher prices are temporary when you look at you know what's causing it a lot of it has to do with energy prices you look back a year ago prices were rock bottom they have of course moved up and the difference is explaining a lot of the inflation that unfortunately people are experiencing at the moment the same goes for some vat impact where v80 was reduced in order to stimulate activity
02:04
particularly in germany now v80 is is back so that's another base effect if you will that explains uh the the prices uh levels that we're seeing now but it seems that for the first time in many many years the so-called slack in the euro area is actually reducing meaning that wages are also on the rise because there are not enough people to fill the open positions is that something you're monitoring you're acknowledging as well yeah we're paying great great and close attention to
02:35
this issue of slack and and there is still quite a lot of slack in terms of employment we still have at least one million more people unemployed today than pre-pandemic so you know there is still a lot of ground to cover for employment to return to the pre-pandemic levels and we hope it will it will happen and as you know as we close that gap uh clearly uh the economic activity will
03:08
continue to be stimulated and we will see uh movement on the on the inflation front is that also the reason why during the last press conference you didn't want to say that this is tapering what you have decided because in a way it is because you're reducing stimulus i mean what is tapered i said the ladies not for taking exactly and the ladies for calibrating because this has been our policy our monetary policy is intended to procure favorable
03:39
financing conditions why is that because we want to support the economic players whether it's households whether it's enterprises large corporates sovereigns all of them need to have favorable financing conditions to cross that bridge towards the post-pandemic stage and to make sure that there are favorable financing conditions we look at the whole chain of financing and we look at inflation outlook and we determine how much
04:11
monetary support is needed and that helps us calibrate the purchases that we believe are necessary which is why we calibrated and decided to purchase moderately in the coming quarter you said you were planning on purchasing moderately what does it mean in numbers does it mean 60 70 or is there more flexibility to it there is flexibility to the the pandemic emergency program that is the one of the
04:41
landmark of of the pep as we call it a pandemic emergency purchase program because we want to adjust we want to have the ability to um you know really operate as close to variations as possible to make sure that financing conditions remain favorable so it works both ways if we see that less purchases will still procure those favorable financing conditions we will purchase less if we see that more is needed we will add to the other
05:13
purchases the financial times did run a story based on a call between german economist and your chief economist that soon after the projection horizon inflation will hit two percent and then they had the conclusion from that that a rate high could be on the cards already by 2023 so why is that wrong in your opinion because you have defended that conclusion it is not at all our conclusion and you know anybody is free to uh draw
05:44
their own conclusions uh on the basis of hearsay secondhand information quick look at this or that what i know for a fact because i know my chief economist and my colleague and friend philipp lane is that he never would have said something like what was alleged to have been said now of course he would say and i would say that if we continue having a good monetary policy in the future at some stage we must hit the two percent mark because that
06:16
that's our job that's you know price stability is defined under our new strategy review by reference to the two percent inflation mark which is identified over a period of time because we are not going to respond you know abruptly or we are not going to trust one number but of course we believe that if our monetary policy is successful we will indeed hit the two percent inflation

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