ECB Chief Economist Peter Praet talked again today. He said in a Reuters television interview that on growth, “risks are mounting”. Though, he also noted “so far we haven’t seen any impact on real data… I’m not excessively worried.” He also reiterated the central bank’s base scenario, “where inflation is going to converge towards 2 percent, is conditional on very easy financial conditions in general.”
Financial markets are seeing ECB’s first rate hike in around next October. Praet gave a nod and said “the market curve that we see today, the interest rate curve, is fully coherent with the objective we have.” He added, “you’re going to have low rates for some period of time.”
Praet also dismissed the rhetorics of Italian government officials and politicians on fiscal spending. He said “in Italy, we have a very big contrast between the communication, words, and the deeds.” And, “The key information will be on the budget, so we have to see those figures. The pension reform is quite an important element in the picture.”
