ECB Governing Council member Joachim Nagel, in remarks made yesterday, reinforced his stance on the ongoing monetary tightening efforts of the central bank. Addressing speculations around a potential pause, he firmly stated, “It’s for me much too early to think about a pause,” emphasizing the significant gap between the current inflation rate and ECB’s target.
Nagel pointed out the glaring disparity between the present inflation situation and ECB’s benchmark, saying, “We shouldn’t forget inflation is still around 5%. So this is much too high. Our target is 2%. So there’s some way to go.”
Despite the overarching concern regarding a slowdown in economic activity in Eurozone, Nagel highlighted the persistence of core inflation and characterized the labor market as being “really pretty good.”
Dismissing prevalent narratives surrounding Germany’s economic health, he countered, “I hear a lot of talk about Germany, the sick man of Europe. This is definitely not the case.” Concluding on an optimistic note, Nagel added, “I’m still pretty optimistic that we will have a soft landing.”
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