ECB’s Orphanides: Weak Global demand likely to continue exerting downward pressure on inflation

ECB’s Orphanides feels weak global demand is likely to continue exerting downward pressure on inflation this year, next year and maybe beyond. He warns that the risk of deflation has increased somewhat in the past few months.

The official feels that if inflation threatens to remain significantly below 2% for a long-time, then additional easing could be warranted. Orphanides feels that when policy rates close to zero, it is informative to focus on other rates.

There’s been no discernable reaction to the comments. The market is now pretty much immune to this sort of rhetoric from a multitude of ECB officials. Nothing really new. Just so much noise.