Minutes of the ECB's April meeting confirm that the central bank, while still cautious about the outlook for underlying inflation, remained quietly confident about prospects for a solid and broad-based economic expansion in the Eurozone. Otherwise, there was little new of note.
Signs of some pick-up in nominal wage growth were welcomed but Governing Council members also noted that increasing risks related to global factors, including the threat of increased protectionism, had become more prominent and warranted monitoring with regard to their implications for the medium-term outlook for growth and prices. Even so, the marked slowdown in the Eurozone real economy last quarter was seen as probably temporary, albeit underlining the need for a sustained highly accommodative monetary stance.
In sum, ECB policy looks set to remain on hold through September and, in the absence of a rebound in domestic demand growth and/or, in particular, higher underlying inflation, in the interim, potentially into 2019 as well.