European Central Bank Governing Council member Olli Rehn, governor of the Finnish central bank, is looking beyond current inflation levels in policy-setting:
- “If we reacted strongly to inflation in the short term, we would probably cause economic growth to stop,”
- “It’s better to look beyond short-term inflation and look at what inflation is in 2023, 2024,”
Rehn was speaking in an interview on Finland’s YLE TV1 on Saturday. Info comes via a Bloomberg report (may be gated)
Rehn is not seeing CPI spurred by wage growth ahead:
- CPI growth in coming years could be “close to the 2% target.”
- and added that he thinks wage increases in the euro area remains subdued and inflation is unlikely to remain permanently high unless spurred by labor costs
Similar remarks were made by European Central Bank President Lagarde last week.
Ignazio Visco, Italy's central bank chief, also spoke on the weekend. He stressed gradual moves ahead:
- “The monetary policy stance remains expansionary, though the gradual normalization will continue at a pace consistent with the economic recovery and changes in the outlook for prices”
Both said the March ECB meeting is the next opportunity to discuss future developments.
