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The European Central Bank’s policymakers are negotiating to agree on its first new strategy in nearly two decades, which may be announced as early as Thursday, and may modify its inflation target and address climate change and housing costs.

The 25 members of its management committee will meet in Frankfurt on Wednesday to try to finalize the final result. 19 months of reviewAccording to two people involved in the discussion. It was originally scheduled to be announced in September, but after policymakers reached agreement on certain matters, European Central Bank President Christine Lagarde is seeking to complete negotiations.

Two members of the committee told the Financial Times that they hope to make a formal decision on Wednesday after good progress has been made on Tuesday night’s dinner.

People familiar with the matter said that if an agreement is reached, Lagarde may announce the results at an online press conference on Thursday. The European Central Bank declined to comment.

The strategic review may lead to major changes in the operation of the European Central Bank.

The most fundamental change may be how it defines its core mission of “price stability”. After years of failing to raise inflation to its target, the European Central Bank is expected to abandon its target of “close to but below 2%”, which is considered too opaque and means setting a ceiling on price growth.

The council broadly supports the more direct 2% target. The central bank may emphasize that its new target is symmetrical, so policymakers will worry about both exceeding the target and falling below the target. The target will be a medium-term target, which can flexibly fluctuate in either direction in the short term.

however.The European Central Bank is unlikely to go as far as the Fed. The Fed has officially promised to let inflation Exceed goal To make up for the period of low price growth.

Morgan Stanley’s European Economic Director Jacob Nell said that he expects this change to “will only have a modest effect on monetary policy stance in the short term” because the central bank has implicitly accepted this strategy.

But he said that other expected changes will “have far-reaching effects over a longer time frame.”

Since replacing Draghi in November 2019, Lagarde has been urging the European Central Bank to address growing public and political concerns about climate change; this idea is expected to become the key to the new strategy after the early opposition from other Council members fades section.

The central bank is expected to announce plans Green shift By incorporating asset purchase portfolios and collateral rules, high-carbon companies that have never planned to achieve the EU’s net zero emissions target by 2050 are inclined in their monetary policy.

This change may be carried out in stages within a few years, as it requires companies to disclose more information and establish an EU Green Classification System For investors, this will list which areas are climate friendly.

The central bank will also promote the European statistical agency Eurostat to add housing in its inflation calculations to address public concerns about monetary policy not fully considering rising housing costs.

According to recent research by the European Central Bank, house prices in most parts of Europe are rising, and this change will increase the current inflation rate by about 20 basis points. At other times, it will reduce the overall rate of price growth.

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