ECB minutes: Had first talk about policy recalibration at Sep meeting

Minutes from the September 2017 ECB governing council monetary policy meeting

Members agreed to monitor FX moves
Agreed that substantial stimulus was still needed
Must be mindful about market expectations on future policy
Reassessment stance must be gradual and cautious
Debated Smaller QE Cut And Shorter Duration Vs Bigger Reduction With Longer Duration
QE Extension Talk Preliminary
Policy Should Be Highly Accommodative Under All Scenarios
View Was Put Forth That Intensity Of Accommodation Could Be Scaled Back
ECB’s Praet Called For “Close Monitoring” Of The Exchange Rate
Some Argued That FX Impact Was Underestimated In Projections, Creating Downside Risk
A View Was Reiterated That ECB Needed To Gain More Policy Space In Either Direction

Overall, not much we didn’t already know. There is an increase in FX chatter among the ECB and that might play into various speeches more often going forward.

Members expressed concerns about the risk of exchange rate overshooting. It was recalled that in the September 2017 ECB staff projections the exchange rate was assumed to be constant over the projection horizon. In this context, the speed of the recent appreciation was underlined, including after the cut-off date of the projections.
Overall, there was broad agreement among members that the recent volatility in the exchange rate of the euro was a source of uncertainty which required monitoring with regard to its possible implications for the medium-term outlook for price stability.

The currency was a big excuse behind why inflation fell and if the euro carries on rising, it won;t be long before they start using it as an excuse again, and that could mean some hefty jawboning.

The full minutes are here