ECB Governing Council member Madis Muller warned today that “inflation is far from our target of almost 2%”. Thus, “that the central bank has to further boost the economy.” He added that the Governing Council will “discuss this at its mid-September meeting”.

His comments were in-line with another Governing Council member Olli Rehn’s. Rehn noted last week that “there is a certain weakening of the economic outlook for Europe in the last couple of months”. And, the backdrop “justifies taking further action in monetary policy, as we intend to do in September.”

Eurozone CPI was finalized at 1.0% yoy in July, core CPI at 0.9%. Headline CPI was just half of ECB’s 2% target. Also, recently ECB has twisted its languages to reflect the symmetric nature of the inflation target. That is, slight overshoot would be allowed to balance out the misses. From this perspective, inflation is really way off target.

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