Bundesbank President Jens Weidmann warned today that ECB must not delay monetary policy normalization. He said, it’s ” time to begin exiting the very expansionary monetary policy and the non-standard measures, especially considering their possible side effects.” And, such normalization process would “take place only gradually over the next few years.” That “exactly why it has been so important to actually get the ball rolling without undue delay.”
Weidmann added that ECB’s projection of 1.7% headline inflation for 2020 is “broadly consistent” with the mandate. And, domestic prices are ” likely to intensify as aggregate capacity utilization increases.” Therefore, “they will thus counteract waning impetus from other components of the inflation rate, such as energy prices.”
