Commenting on the European Central Bank’s (ECB) exit timetable, Sven Jari Stehn, Chief European Economist at Goldman Sachs said that the central bank could start stimulus withdrawal towards the end of 2021.
Given where the FOMC is placed in regards to adjusting policy this “should make the [ECB] Governing Council more confident that it can start to reduce the PEPP purchases later in the year.”
“We do think they will step down the PEPP purchase program at the September meeting going into Q4.”
The ECB is not “in a rush to follow the Fed in accelerating the exit timetable.”
“We have four fiscal reasons for thinking that the return to fiscal consolidation will not be as abrupt as after the GFC and during the eurozone crisis.”