Italian ECB Governing Council member Fabio Panetta warned that Eurozone inflation is likely to remain below the 2% target for an extended period. Speaking at a conference today, Panetta said the region continues to face a “persistently weak” economy, which, coupled with subdued price pressures, calls for caution on the monetary policy front.
He pointed specifically to “substantial” risks surrounding US trade policy and the Middle East conflict. These factors, Panetta said, make it “difficult to quantify” the clouded outlook.
“Against this backdrop, the ECB’s Governing Council, at its most recent meeting, reaffirmed a flexible approach, keeping its options open,” he said. “It will continue to take decisions on a meeting-by-meeting basis, without pre-committing to a defined course for monetary policy,” he added.
