ECB Governing Council member Klaas Knot acknowledged the recent strides the central bank has made towards achieving its inflation target, but he emphasized that there’s still “a long and winding road ahead”. Nevertheless, expressing contentment with the current policy stance, he mentioned, “I do believe that policy at this moment is in a good place.”
Knot did not shy away from underscoring ECB’s readiness to take further action if needed, affirming, “we will remain vigilant and we stand ready to adjust interest rates even more if the disinflation process were to stall.” He emphasized that ECB has a “credible prospect” of achieving its inflation target by 2025.
Highlighting challenges in the short term, Knot pointed out that the eurozone is currently grappling with economic stagnation. While the manufacturing sector is already in a recession, the services sector is also beginning to feel the pressure.
Nevertheless, Knot views this slowdown as “desirable in a way.” Despite the immediate hurdles, Knot remains optimistic about the medium-term outlook, suggesting that growth is poised for a rebound in the foreseeable future.
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