ECB's Schnabel
- We should proceed with caution and remain data dependent.
- Price stability is within reach.
- Lowering policy rates gradually towards a neutral level is the most appropriate course of action.
- Once price stability has been restored, central banks can afford to tolerate moderate deviations of inflation from target, in both directions
- In the absence of such shocks, policy should be careful, not to overreact
- Monetary policy should focus on responding forcefully to shocks that have the capacity to destabilize inflation expectations
- central banks can have a greater tolerance for moderate deviations of inflation from target, in both directions.
- Monetary policy can not resolve structural issues that durably weigh on price pressures.
- Over the next 12 months and and economic expansion is still much more probable than a recession.
- Gradual removal of policy restriction remains appropriate
