ECB announces new strategy of targeting 2% inflation on symmetric basis

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The European Central Bank announced its new strategy, saying it will target inflation of 2% on a symmetric basis over the medium term, instead of targeting inflation of close to but below 2%. "When the economy is operating close to the lower bound on nominal interest rates, it requires especially forceful or persistent monetary policy action to avoid negative deviations from the inflation target becoming entrenched. This may also imply a transitory period in which inflation is moderately above target," the ECB said. The ECB also said it would it will seek to add the impact of owner-occupied housing over time while still targeting the HICP measure of inflation. The ECB has been reviewing its strategy since Jan. 2020. The euro EURUSD, +0.48% remained up 0.4% immediately after the announcement. ECB President Christine Lagarde will hold a press conference at 8:30 a.m. Eastern to explain the move.

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