ECB’s Governing Council member Robert Holzmann told CNBC that the central bank’s forward guidance went “a step too far”. The statement released last week noted that interest rates will remain at their present or until it sees inflation in line with the target of 2% “well ahead” of the end of its forecast horizon.
“We would have wished a different guidance, which doesn’t bind us too long in the future, in order to stay agile, and ready in case inflation requires an earlier liftoff,” he said.
“Our mandate breaks any forward guidance, but I think it would have been more honest to the markets to tell ‘Yes, we want to stay accommodative as it is for the time being, but we stand ready to change the rate if it’s necessary’,” Holzmann added.
