- We can now see that our efforts to bring inflation down have been effective
- We continue to expect inflation to stabilise at our 2% target in the medium-term
- We therefore decided to keep key ECB interest rates unchanged at our monetary policy meeting earlier this month
- We will continue to follow a data-dependent and meeting-by-meeting approach to determining the appropriate monetary policy stance
- Our interest rate decisions will be based on our assessment of the inflation outlook and the risks surrounding it
- We are not pre-committing to a particular interest rate path
- The ECB pays close attention to households’ inflation perceptions
- Inflation perceptions matter for three reasons
- First, perceptions directly influence economic behaviour
- Second, perceptions of current inflation shape expectations about future inflation
- Third, inflation perceptions can influence public trust in institutions – including the ECB
- Full transcript
There’s nothing in her speech that really stands out from what has already been communicated before this. The ECB remains on the sidelines and are not yet in a position to pre-commit to moving just yet. As things stand, markets are also not pricing in any rate changes by the central bank for the whole of this year.
This article was written by Justin Low at investinglive.com.
