At the meeting of the Governing Council of the European Central Bank (ECB) in April, some members "viewed it as important to act without undue delay" to achieve price stability in the medium term, including to "prevent the temporary bout of higher inflation from becoming entrenched and to prevent inflation expectations from rising further" from the 2% target. These members argued monetary policy still stimulates the euro area economy, pointing to the current negative interest rates.
Meanwhile, other members stated that adjusting the monetary policy stance too aggressively "could prove counterproductive," including lowering growth while inflation remains high. They recalled other measures the ECB has already undertaken to normalize policy, such as the phasing out of the pandemic emergency purchase program (PEPP) and the expected end of the asset purchase program (APP) in the third quarter of 2022.
