ECB’s Rehn warns that central bank needs to look beyond inflation

Dhwani Mehta FXStreet

European Central Bank’s (ECB) Governing Council Member Olli Rehn warned in an interview on Finland’s YLE TV1 on Saturday, overreaction to inflation by the central bank could stem the economic growth.

Key quotes

“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.”

“We will have time to react in the March meeting and in later meetings if it looks like the situation is markedly different than it now appears.”

Separately, speaking at an event in Parma on Saturday, ECB policymaker Ignazio Visco, “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.”

Read: EUR/USD bears are moving in with a focus on 1.1305, Russia invasion risk weighing

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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