ECB's Makhlouf: Growth across euro area has improved strongly

European Central Bank governing council member Gabriel Makhlouf noted on Friday that the growth across the euro area has improved strongly since the pandemic, as reported by Reuters.

Additional takeaways

"Temporary inflationary effects are expected to dissipate in 2022."

"Inflation is likely to weaken again to levels below 2% over the medium-term."

"There is, however, considerable uncertainty about the persistence of price pressures."

"We need to interpret this data and the outputs of our models with caution."

"Pandemic is bringing about structural changes in our economy, which may only become more evident over time."

"It will be important to maintain an accommodative monetary policy stance for some time."

"Raising interest rates in response to a temporary rise in prices would be harmful as we are trying to nurse the economy back to health."

"With correct monetary and fiscal policies in place, a sufficiently strong demand-driven recovery should see inflation return to 2% over medium-term."

Market reaction

Investors paid little to no attention to these remarks and the EUR/USD pair was last seen clinging to modest daily gains at 1.1780.