Talking to students in Frankfurt, ECB President Mario Draghi noted people say “it’s been so long when we haven’t reached the below but close to 2 percent, why don’t you lower inflation to something lower and accept defeat”. He then emphasized ” that’s exactly why we are not doing it, because we don’t accept defeat.”
Draghi also admitted it’s “taking longer” for transmission of higher nominal wages growth into a higher inflation. And one of the reasons is that “profit margins are being compressed”. But he also reiterated “it’s a matter of being patient and persistent with the accommodative monetary policy and it will come, it will happen”.
