Lagarde speech: Recovery from a services-led recession tends to be slower

"Research finds that the recovery from a services-led recession tends to be slower than from a durable goods-led recession," Christine Lagarde, President of the European Central Bank (ECB), said in her prepared remarks at the ECB Forum on Central Banking 2020.

Additional takeaways 

"When thinking about favourable financing conditions, what matters is not only the level of financing conditions but the duration of policy support, too."

"Stance function of the PEPP gives us the scope to counter the pandemic-driven shock to the path of inflation."

"While all options are on the table, the PEPP and TLTROs have proven their effectiveness in the current environment and can be dynamically adjusted to react to how the pandemic evolves."

"They are therefore likely to remain the main tools for adjusting our monetary policy."

"We will continue to deliver the financing conditions necessary to protect the economy from the impact of the pandemic."

"It is crucial that monetary policy ensures favourable financing conditions for the whole  economy."

"The economic recovery from the pandemic emergency could well be bumpy."

Market reaction

The EUR/USD pair edged slightly lower and was last seen losing 0.42% on a daily basis at 1.1765.