Philip Lane, the chief economist of the European Central Bank, indicated that although most of the factors suggested a continuous decrease in inflation in the euro zone, there were also concerns, such as the possibility of commercial negotiations between the EU and the USA without success, which could lead to an increase in inflation.
He declared in an interview with the German newspaper Frankfurter Allgemeine who needed to find an intermediate path when asked about the implications for the interest rate policy.
Lane added that they would respond with additional cuts of interest rates if they saw signs of an additional fall in inflation. However, it was pointed out that the scope of the discussion is quite limited, without anyone mentioning significant reductions in rates. They affirmed that they are in a central bank normality zone.
Source: Fx Street
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