That just reaffirms the message from Lagarde earlier
The forecast he is mentioning is between the ECB’s ‘medium’ and ‘severe’ scenarios, which Lagarde already made a similar mention to earlier here.
In any case, this sets up expectations ahead of their June meeting that all of this will be factored into the staff projections and that more stimulus may accompany it – as they rule out their ‘mild’ scenario from before.
Just be reminded that PEPP should meet its target some time around September or October, so the ECB should communicate an increase in the size sooner rather than later.
Despite the additional easing in nature, the reassurance should keep market participants satisfied that they are willing to do more to ensure financial conditions stay as they are. Remember, “close the spreads”.