Talking to Bloomberg TV, ECB Governing Council member Ignazio Visco said, “Since we have also been observing a substantial reduction in energy prices, we have to expect that this will be seen also in underlying inflation in the coming months, certainly by the end of the year.”
Visco also suggested the possibility of a quicker pace than initially forecasted by ECB, saying, “The ECB projects that by the end of 2025 there will be 2% — my impression is that it might be faster.”
Visco cautioned against the risks associated with making excessive adjustments, stating, “There is a risk of doing too much and I think that we have to be careful about that.” However, he also noted the potential risk of doing too little, emphasizing the need for balance and judicious decision-making based on incoming information.
Meanwhile, another Governing Council member Klaas Knot expressed his perspective on potential policy adjustments beyond July. “For July I think it (rate hike) is a necessity, for anything beyond July it would at most be a possibility but by no means a certainty,” Knot said. He urged careful monitoring of the data from July onwards, to assess the distribution of risks surrounding the baseline.
