The ECB did say something!
Inflation undershoot will not result in rate cuts. Even though an undershoot of the inflation target is built into the ECB's published economic forecasts, that is not grounds for further easing. That means it will take a big shock on the tariff front for the ECB to cut rates further. That cements the divergent paths I anticipate for the US Fed and the ECB. It speaks to a weaker US$.
"Uncertainty" as an economic variable has now been added as an enhancement to the ECB's risk assessment framework and monetary policy assessment. Previously only Growth and Inflation figured. An example of what that means is: if the ECB has a forecast for GDP and Inflation but it deems that uncertainty will be on the rise (influencing both consumers and corporations) then interest rates would be kept lower than what is justified by the forecasts for GDP and Inflation. And of course the opposite applies symmetrically.
Stablecoins. Asked about US$ based Stablecoins (SCs) in the Q&A, Mme Lagarde said:
- The US Genius Act helps define the risks, benefits and prospect of US$ based Stablecoins.
- It is too early to have clear idea of what the consequences of SCs will be.
- The ECB must consider SCs only in its role as the curator of the currency and will act on SCs only with the optic of keeping the Euro sound and safe.
- The ECB response should be to develop its own Digital Currency.