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00:00The ECB not committing to a particular rate path. This was widely expected future. They're forecasting inflation ultimately to stabilize around 2% at in 26 and 27 future. When you look at things, could that story be disrupted by the trade variations that we've seen already so far this year? Yeah, As in when it comes to forecast decision, everything seems pretty much as what we had expected so far. You know, from the ECB perspective, they are basically it's not no longer about tinkering the policy for the disinflation process in Europe area. It's basically about the uncertainties. And when it comes to tariffs, so far, Europe has actually done a pretty good job. We are not seeing the kind of disruptions in terms of growth PMIs. But I think can that domestic resilience actually continue when the global resilience is actually being a little more shaky right now? So I think that's where the ECB needs to address whether they are done or there's more to go just because of the global uncertainty. And if the domestic consumption can be as strong as what they are expecting going forward. Well, as you know, there was a very simple story being told after April 2nd of the massive tariffs we saw from the president, particularly the massive tariffs on China, is that China would do very little to address its overcapacity. And because the walls were going up in America, Europe would have to wait it and that this shock was actually a disinflationary shock for the Europeans when people thought it might be, I stress might be an inflationary shock for the US economy future. Is that no longer the case? Looking at 226 I think it's definitely the case and it is something that even the ECB minutes from July have pointed out. We are already seeing signs of good dumping in Europe, along with low oil prices, higher euro USD. All is basically giving you the kind of inflation forecast that ECB is looking right now. But I think at this stage they are looking at as a just one time shock and they do not want to be very reactive just because, you know, even we are the middle range of the neutral and they don't want to remove all the capacity of easing just because of, you know, sudden, just small jumps in the system. But this is one of the risks that is being highlighted. How much does this act as a detriment to growth? And I say this at a time where the economic growth forecasts in Europe are some 1.2% for this year, that's higher than expected, and next year coming in at about 1% below where previously was expected IT project. How much is this no longer a tailwind that the ECB could potentially consider easing even if they aren't going to necessarily hike? I mean, there's always a risk. But I think one thing that is changed in the European narrative from the 2018 story that we have lived with that in China is that Germany is ready to spend. They are not holding themselves back and that's visible in the PMI services. So I think can be I mean, at least the ECB wants to be patient for the next couple of months as how this defense and infrastructure spending plays up. He note that infrastructure spending, it has a good multiplier for growth unlike a consumption driven expenditure. So I think that's where there are positives in the system that we should not ignore. And I think that's why the ECB wants to dwell on. But you know, they can buy another four or five months, but after that, if they don't see the German growth picking up, I think the case for easing is still there. Pooja, this is a forgettable decision. We'll see what actually happens in the news conference. But right now we're looking through and this is pretty much exactly in line how jealous is the Bank of England and the Fed that this is sort of something that can fade into the background and sort of be a non-event? Sorry I didn't catch you. Just how unique is this position of the ECB where they're at a somewhat of a non-controversial position versus, say, the Federal Reserve next week grappling with inflation and slowing growth, while also the Bank of England dealing with the deficit and the overhang there? No, no, definitely. I think ECB has definitely got it easy. I think it's more I think even fed when it comes to labour market, they are getting signs. They have a dual mandate. They know how to go with policy forward. But I think for beauty it's much more tricky when inflation is just so sticky and even growth. It's actually one of the best performing economies right now. So I think for boys it's more of a painful decision that how long can they be actually restrictive, which is something, you know, when trouble comes to an economy, it comes very quickly. And I think that's what even central banks are right now, a bit scared of off because they know everyone wants a soft landing. Right. And the ECB did manage to create. It's all well done them.

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ECB to Weigh Global Uncertainty, Europe Resilience: Kumra

Pooja Kumra, European and UK Rates Senior Strategist at TD Securities, says the uncertain global outlook will now be a focus for the ECB rather the disinflation process in Europe. She speaks to Bloomberg's Jonathan Ferro and Lisa Abramowicz on 'Surveillance.' (Source: Bloomberg)

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