ECB's Paret: Metrics of underlying price pressures continue to be subdued

Key highlights from the remarks by Peter Praet, Member of the Executive Board of the ECB, at the Fixed Income Market Colloquium, Rome, 4 July 2017:

• Over the past three years one could say that we have been effective in shielding short-to-medium term interest rates from shocks that could have weakened the stimulus that the euro area needed to consolidate the recovery.
• As the economic prospects brighten, higher expected returns on business investment will make borrowing conditions increasingly attractive.
• We need to be patient, because inflation convergence needs more time to show through convincingly in the data.
• The euro area’s economic environment is improving, and the fat negative tail to inflation expectations, which was so visible at the start of our asset purchase programme, has virtually disappeared.
• This strengthens our confidence that headline inflation will gradually move towards the Governing Council’s objective.
• Measured inflation remains exceedingly volatile and metrics of underlying price pressures continue to be subdued