ECB Chief Economist Peter Praet said today that “clearly we see progress in the underlying (prices), what is behind the inflation process.” However he emphasized that “it’s a long process and conditioned on very easy monetary conditions.”
Yesterday, Euro spiked higher on ECB President Mario Draghi’s comments that “domestic price pressures are strengthening and broadening”. However, Praet talked it down and said there was “nothing new” in Draghi’s comments.
Also, Praet added the the biggest risk to price stability is a “growth accident”. That is, a sudden stop in the growth cycle. And that could come from from rising protectionism or emerging markets slowdown.
