Who can still say that the world of central bankers is dark and austere? While concluding, within the prestigious Bocconi University of Milan, a speech on the evolution of the action of the European Central Bank in the face of the pandemic, Fabio Panetta chose to quote… Daft Punk. More precisely, the member of the ECB’s executive board chose one of the greatest hits of the legendary French electro duo, “Harder Better Faster Stronger”, released in October 2001, to describe the direction that the institution to which he belongs should take.
“The harder our efforts to close the output and inflation gaps, the better” the outlook for the euro area economy will be. And the faster we get there, the stronger our growth potential will be ”, he then developed. But beyond the musical reference, this speech marked the specialists of the ECB.
“Fabio Panetta concludes that the recent rate hike is ‘undesirable’ and ‘must be resisted’. He calls for a more proactive approach by immediately using the PEPP [le programme d’urgence de la BCE, NDLR] to preserve accommodating financing conditions, ”emphasizes Frederik Ducrozet at Pictet. One way of announcing an imminent increase in the size of central bank purchases.
Above all, he explicitly referred to a control of the yield curve – that is to say, keeping the borrowing costs of governments at a favorable threshold – while the ECB has always refused to do so. an official goal. “Last week, ECB chief economist Philip Lane said it was clear the central bank was not engaged in controlling the yield curve. This could lead to interesting debates within the Board of Governors ”, laughs Frederik Ducrozet. Let us hope that this antagonism does not lead, for the Council, to the fate of Daft Punk: a final separation.