ECB Executive Board member Isabel Schnabel said in an interview, ” it has become increasingly likely that inflation is going to stabilise around our 2 per cent target over the medium term.” There, “we should start thinking about a gradual normalization of our policy.”
“With the most recent data, however, the risk of acting too late has increased and therefore we need a careful reassessment of the inflation outlook,” she added.
Schnabel also pointed to a “demand component” in inflation in rising wages, in addition to energy prices and supply chain bottlenecks. She added, “we cannot simply look through everything, especially if inflation now becomes more broad-based and more persistent than we originally thought.”
