Inflation in the euro zone is in line with the European Central Bank’s (ECB) target of 2%, and Mario Centeno, the ECB’s head of economic policy, expressed concern that inflation could fall below target. At an event in Washington on Tuesday, Centeno highlighted the risk of an inflationary deficit that could hamper the region’s economic growth.
Centeno, a member of the ECB’s Governing Council, advocates for a prudent approach to monetary policy, calling for a “gradual, constant and predictable rate of interest rate” towards what he considers a neutral level, potentially around 2% or slightly lower. advocated a reduction.
The outlook comes as the ECB has already cut interest rates three times this year, most recently on Thursday. Market investors are expecting further rate cuts at the next four or five central bank meetings.
The expectations are based on signs that inflation may slow more quickly than expected as eurozone economic growth continues to show signs of weakness.
Reuters contributed to this article.
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