ECB Governing Council member, Dutch central bank Governor Klaas Knot talked about monetary policy as he presented his bank’s annual report in Amsterdam today. He said:
- “The top priority is to normalize monetary policy and strengthen the economic and monetary union,”
- “This is now a widely-shared realization, certainly also in the financial markets.”
- “If you look at the market expectations of our policy action, I would say they have more or less converged at what I call a sweet spot,”
- “There is a fair degree of consensus around these expectations.”
- “I would say the likelihood of us erring on the side of being too cautious is a bit larger than for us being too bold,”
- “All in all, undoing these unorthodox, unconventional instruments could easily last for most of a decade.”
Regarding trade relationship with the US, he said:
- “The question is if Europe will come with countermeasures which could make us slip into a trade war,”
- “But don’t be mistaken, if the U.S. were to implement trade restrictions on say steel, it will be the American consumer paying the price.”
