• Fragmentation has always been a concern for the ECB
  • PEPP was launched with flexibility in mind, and this applies to the reinvestment phase as well
  • We also decided yesterday to mandate the relevant committees to accelerate the completion of the design of a new anti-fragmentation instrument
  • Inflation is very high, more persistent and broad-based than we thought some months ago
  • We intend to raise rates by 0.25% in July
  • For September, we can consider a bigger increase if the inflation

On fragmentation risks, it is better late than never. This decision-making is but a reflection of the lack of awareness and urgency by the central bank over the past six months – ever since they announced the end rushed of PEPP.

As for the July and September rate hikes, his messaging isn’t anything new.