Inflation has picked up, but not as fast as we would have expected

– Bond purchase reduction should be done gradually next year, until we are no longer purchasing additional bonds
– Bond purchases will come to an end, while interest rates will remain low, well past the horizon of net asset purchases
– We need to discuss how to exit from our unconventional monetary policy, and then we need to do it
– The key message is that all the factors that are holding down inflation seem to be temporary
– I have argued that, given the low inflation, monetary policy needed to be expansive. Admittedly, the appropriate degree of expansion and the necessary tools are moot points.

Slow reaction , the Euro ticks up a spread 1.1747, EURJPY 132.35, EURGBP 0.8945

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