In an interview with Deutschlandfunk radio, Bundesbank President Joachim Nagel painted a cautiously optimistic picture of ECB’s monetary policy landscape, implying that restrictive measures were beginning to bear fruit.
“We’re coming to the home stretch in the sense that we are reaching the area in monetary policy that’s considered restrictive,” Nagel noted, suggesting that ECB’s tightened policy stance was close to hitting its intended mark. He asserted his confidence that the monetary policy was indeed manifesting its effect.
However, he was quick to emphasize that ECB’s task was far from complete. “But we are not done hiking yet,” he added, “There is still work to be done on core inflation.”
Nagel emphasized the importance of staying the course with the current monetary policy, urging persistence. “We need to stay stubborn,” he said, reinforcing his commitment to seeing the central bank’s measures through.
Addressing concerns about the potential impact of the ongoing banking sector upheaval in the US on German banks, Nagel sought to allay fears. “German banks are in a fundamentally solid position,” he assured, indicating that he did not share the prevailing apprehensions over the stability of German banks.