ECB Governing Council member Olli Rehn said today, “We are almost in between a rock and a hard place so that on one hand we have to ensure that the recovery will continue. On the other hand, we have to prevent higher inflation expectations being entrenched and being reflected in the labor market.”
“In other words, we have to avoid second-round effects. Therefore, in my view, we should move relatively quickly to zero and continue our gradual process of normalization of monetary policy as we have done,” he continued.
“Of course, all this on the condition that Russia’s war in Ukraine will not substantially escalate and intensify which could derail all the forecasts and the economic recovery.”
