ECB's Lautenschlaeger: Low interest rates are justified; have side effects

Key highlights (via Reuters) from the speech by Sabine Lautenschläger, Member of the Executive Board of the ECB and Vice-Chair of the Supervisory Board of the ECB, Hohenheim University, Stuttgart, 9 October 2017:

• The appropriate degree of expansion and the necessary tools are moot points.
• Time has come to put the unconventional tools back into the box.
• We should begin to scale back our bond purchases at the beginning of next year.
• Low interest rates are justified; have side effects.
• It is important that we really move towards the exit – step by step, but steadily and in a clear direction.
• Bond purchases will come to an end, while interest rates will remain low, well past the horizon of net asset purchases. but we still need to decide on a timeframe.
• Inflation has picked up, but not as fast as we would have expected.
• All the factors that are holding down inflation seem to be temporary.
• Reducing our bond purchases next year should be done gradually, until we are no longer purchasing additional bonds.
• I think we should begin reducing our bond purchases next year.
• This should be done gradually, until we are no longer purchasing additional bonds
• Total volume of bonds would initially remain constant, as would the expansive effects.
• Inflation will return to our goal. it’s just a question of time
• Factors that are holding down inflation seem to be temporary.