Moments ago Bloomberg's Richard Breslow explained why the ECB's minutes, since they would confirm the dramatically easing nature of the upcoming ECB action, are far more important than what the Fed disclosed yesterday. And now, here are the minutes themselves, with the following summary courtesy of Bloomberg.
- Amid slow euro-area recovery “it was argued that, in such an environment, the risk of deflation remmained relevant,” according to account of Governing Council’s Oct. 22 meeting in Malta, published Thursday.
- “Reference was also made to a potential deflationary scenario, which could not be fully excluded as a tail risk”
- “Nevertheless, it was highlighted that the likelihood of deflation had decreased since the start of the year”
- While weak price pressures are mostly due to lower oil prices, “indirect effects on core inflation were significant in the current environment,” ECB account shows in section on presentation by Chief Economist Peter Praet
- Inflation, “after a pickup around the turn of the year owing to oil-price related base effects, could fall back to relatively low levels in early 2016”
- “Lower energy prices and recent exchange-rate developments, if not reversed, suggested a further downward revision to the inflation outlook”
- “Such a downward revision to the inflation outlook was seen as particularly worrisome” as it would imply a further postponement of the return of inflation to levels in line with ECB’s goal
- Governing Council agreed that degree of monetary-policy accommodation would need to be re-examined at Dec. 3 monetary-policy meeting
For now the market reaction has been muted.
Full minutes here [3].