ECB’s Lane confidence on inflation, cautions on interpreting data noise

ECB’s Chief Economist Philip Lane expressed “a lot, a fair amount of confidence” today that Eurozone inflation is on track to return to 2% target by the latter half of next year.

In his remarks, Lane highlighted the importance of judiciously interpreting incoming economic data, emphasizing the need to “differentiate the noise and the signal.”

Lane’s confidence stems from anticipated “muted” cost pressures in the coming year. However, he underscored the critical need for a reduction in “domestic services inflation momentum” as a necessary condition for achieving the inflation targets.