The European Central Bank's (ECB) Governing Council member Klaas Knot said on Tuesday that current supply-side shocks may not be temporary but the inflation outlook is better than before the pandemic. That should guide the decision on bond purchases, he noted, adding that ECB is likely to end PEPP purchases in March next year.
Knot also expressed the view that inflation should decline in 2022 and suggested that if the market is right on inflation, then it is also right on rates pricing. The policymaker said he sees the ECB interest rate lift-off sometime after 2022.