- should inflation risk become entrenched below the ECB’s target
Executive Board member Benoit Coeure once again trying his best to stir things up, this time talking to Slovenian newspaper Delo.
The former deputy director general at the French treasury says
The Governing Council’s assumption is that the rate of inflation will gradually increase towards our target of close to, but below, 2%. We are however closer to the area where inflation expectations could be altered and create downside risks to price stability
So we are very vigilant regarding risks to our baseline scenario, which envisages inflation slowly going back to 2% over the medium term. We remain firmly determined to maintain the high degree of monetary accommodation that is appropriate for the euro area economy, andwill not hesitate to take further decisive action if required
Over the next few weeks and months,if risks to our main scenario materialize, we will be ready to act, consistent to our forward guidance
Coeure caused the euro to wobble earlier last week when he said that ECB were talking “very seriously” about negative interest rates but these comments published today, which are more in line with what we have already from the ECB, and what he said subsequently, should have minimal impact on price at the moment.
Unless,of course, the market’s looking for an excuse to sell after all the buying in the last few sessions.
