ECB Vice President Luis de Guindos recently highlighted the persistence of core inflation, stating that it may be more persistent than markets anticipated. He emphasized that “core inflation remains very sticky,” and while he believes it will eventually come down, the starting point is very high.
De Guindos also stressed that ECB will continue to communicate monetary policy on a meeting-by-meeting basis, with a data-dependent approach, rather than shifting to a forward-guidance strategy for several months. He added, “I believe that the current approach will be maintained for a few months until the evolution of inflation and the effects of our measures become clearer.”
In a separate statement, ECB Governing Council member Ignazio Visco echoed de Guindos’ concerns regarding stubborn core inflation. He emphasized the need for caution when setting policy, recommending that decisions be made on a meeting-by-meeting basis.