ECB Governing Council member Gabriel Makhlouf said that “we central banks need to do a better job at communicating and explaining”. He criticized “there continues to be uncertainty about exactly what ‘close to, but below’ means” regarding ECB’s price stability definition of “below but close to 2%”.
Makhlouf added, “it has been argued that since central banks are unlikely to hit a point target on a regular basis, having one makes it harder to explain policy to the public and that a range, with or without a focal point, may be more realistic and therefore provide the central bank with more credibility.”
