Ecb On Track To Achieve Inflation Target

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Ecb On Track To Achieve Inflation Target

Ecb On Track To Achieve Inflation Target

key ECB policymaker Villeroy has recently commented on the inflation situation in the EU block. According to him, the monetary policy of the ECB is sufficient to lower the inflation towards the 2% target.

According to Villeroy, the target of 2% inflation will be achieved in the next year. He believes the plan is still on track despite the noise seen in the monthly data.

Ecb Cuts The Policy Rate By 0.25%

Just a week ago, the ECB issued a 0.25% rate cut, which cast doubts about the disinflation in the block. However, the ECB policymakers believe that disinflation target will be achieved despite the rate cuts.

According to the ECB member, the inflation data will show a lot of volatility if we look at it on a month-to-month basis. However, the bigger picture still tells us that the inflation is cooling down.

The noise in the inflation data is not something that should be looked at for meaning. The ECB policymaker added that they remain outlook-driven as they look at the bigger picture.

So, unless an external shock changes the fundamental outlook, the ECB will remains confident that inflation will come down to around 2% in 2024. They also added that the ECB will manage to achieve a soft landing as compared to a hard landing.

Villeroy is also the French's central bank head and a key member of the European Central bank. From his comments, it looks like the ECB will adopt a gradual approach when it comes to the interest rate policy.

Overall, it seems that the ECB has decided to ignore the noise that is coming from the inflation data on a m/m basis. Instead, the central bank wants to look at the overall trend to gauge the direction of the inflation.

Of course, any sudden shocks to the disinflation trend could force the ECB to stop the rate cuts policy and start thinking about rate hikes.

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