European Central Bank (ECB) Chief Economist Philip Lane said on Friday, “wages will be the primary driver of inflation over the coming years.”
Key quotes
“Staggered nature of wage setting means that adjustment of nominal wages to the cumulative increase in cost of living will play out over several years.”
“Even after energy and pandemic factors fade, wage inflation will be a primary driver of prices in the next several years.”
“Long-term inflation expectations appear well anchored.”
Meanwhile, ECB policymaker Madis Muller said it is “too risky to wait for a downturn to cool prices.”
Market reaction
EUR/USD stays well bid above 1.0400 on Black Friday, as the US Dollar weakness continues to dominate across the board. The spot is up 0.19% on the day.
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