ECB Governing Council member Fabio Panetta indicated today the “reduction of official rates could proceed gradually”, in line with the return of inflation towards the ECB’s target. Speaking to bankers in Rome, Panetta emphasized that as long as macroeconomic trends remain consistent with ECB’s expectations, this gradual approach will be maintained.
Panetta downplayed concerns over persistently high service sector prices, explaining that it is typical for service prices to decline more slowly compared to goods prices. He also noted that wage growth is expected to moderate in the near future.
“Past interest rate hikes are still dampening demand, output, and inflation and will continue to do so in the months to come,” Panetta remarked.
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