HomeLive CommentsECB's Panetta: Must manage risks beyond baseline scenarios

ECB’s Panetta: Must manage risks beyond baseline scenarios

Speaking today, ECB Governing Council member Fabio Panetta noted that the current macroeconomic conditions support “normalization of the monetary stance.” He added that ECB initiated this process recently and, under the “baseline scenario,” intends to continue it “gradually and smoothly.”

However, Panetta cautioned that the inflation and growth projections represent only one of many possible outcomes. He stressed that monetary policy must also manage “risks and tail scenarios,” not just baseline forecasts. The prevailing political and geopolitical risks, he said, necessitate “awareness, flexibility, and state-contingent action plans.”

Panetta’s comments come just days before French voters head to the polls for the first round of parliamentary elections. He highlighted the potential economic implications of political turnover, explaining that it inherently brings policy uncertainty. This uncertainty affects households and investors as they try to predict how new governments will handle critical economic and political decisions.


Featured Analysis

Learn Forex Trading