ECB Governing Council member Gediminas Simkus commented today that the disinflationary trend is progressing steadily, though he acknowledged that services inflation remains elevated.
Simkus expects monetary policy to gradually become less restrictive, with the central bank lowering interest rates toward a “natural” level, estimated to be between 2-3%.
However, he emphasized that if the disinflation process becomes deeply “entrenched”, rates could potentially fall below the natural level.
