All members viewed risks to inflation outlook as being to the upside – ECB accounts
- All members viewed the risks surrounding the inflation outlook as being to the upside relative to the staff baseline projections
- It was suggested that the evolution of underlying inflation dynamics was indicative of persistent rather than temporary underlying price pressures
- It was suggested that it would be misleading to look at current headline inflation in isolation
- Underlying inflation, while very relevant for monetary policy, was not the same concept as medium-term inflation
- Core inflation and non-energy inflation were expected to peak in 2027 and then decline
- Therefore, the rise in underlying inflation could be viewed as only reflecting a lagged adjustment to the original shock, which did not preclude inflation from returning to target in the medium-term, assuming sufficient monetary policy action
- It was suggested that recent indicators of wage growth had been less responsive to recent developments than previously expected
- This could imply that the risk of second-round effects via wages was lower than thought
- The latest rate hike should not be seen as an insurance hike but rather as a decision that was robust across the baseline outlook
- Members reiterated that future interest rate decisions would continue to be based on its assessment of the inflation outlook and the risks surrounding it
- To continue to follow a data-dependent and meeting-by-meeting approach
- Given the continuing high uncertainty, it was important to refrain from giving any guidance regarding the future interest rate path
- Full accounts
There isn't anything in here that we do not already know about the ECB and their current policy stance. With the latest inflation numbers for June being less worrisome, policymakers can be happy about being afforded some extra time in mulling over what to do once the summer break ends.
For now, they will be sticking to a wait-and-see approach especially since US-Iran dynamics continue to be fluid and can change up at any time. The developments this week are a good testament to that.
This article was written by fl9bde53b91e184082bbe3aa3acaaf2cb0 at investinglive.com.提供 MainLink：Investinglive RSS Breaking News Feed
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