President of Germany's central bank: ECB tools aim to stabilize inflation, not control yield spreads

⑴ European Central Bank Governing Council member and Bundesbank President Joachim Nagel stated that the European Central Bank’s tools, including the bond purchasing transmission protection tool, are all aimed at achieving the inflation target. ⑵ He made it clear that these tools are not intended to target specific bond spread levels. ⑶ When asked about the transmission protection tool, Nagel said the market mentioned one of the tools, but the European Central Bank has several other tools. ⑷ He emphasized that these tools have nothing to do with specific spread levels, and the core is price stability. ⑸ Overall, Nagel’s remarks reiterated the European Central Bank’s inflation-anchored policy framework, indicating that the central bank will not intervene solely to narrow spreads. In the future, attention should be paid to how eurozone inflation trends and changes in bond market pressures affect the policy path.