The executive director of the European Central Bank, Isabel Schnabel, has made some statements during a speech scheduled for this Monday, pointing out that the inflation will decline markedly as soon as next year.
Featured statements:
Sentiment in the euro zone is lighting up.
It is understandable that people are concerned about the evolution of inflation.
If inflation sustainably reaches our 2% target unexpectedly soon, we will act just as quickly and decisively.
We will only start the normalization process when we are sure of reliably reaching our inflation target..
A premature tightening of monetary policy in response to a temporary rise in inflation would stifle the recovery.
In the context of rising inflation rates, particularly in Germany, I was concerned to ease people’s concern that inflation may remain persistently too high.
In all likelihood, inflation will decline markedly as early as next year.
There are good reasons to assume that the current constellation of fiscal and monetary policy in the euro zone may finally pave the way to the low interest rate environment.
In light of the extremely low level of inflation last year, current inflation rates must be interpreted with caution.
Inflation in the euro area, and also in Germany, is likely to ease markedly next year.
We will vehemently counteract persistent upward and downward deviations from our inflation target.
We will act carefully and cautiously in the current environment to finally smooth our way out of the low interest rate environment after so many years.
Adjusting for the basic effects of the pandemic, current inflation is still too low rather than too high.
Market reaction
The shared currency had a rather muted reaction to Schnabel’s comments and remained at the mercy of the price dynamics of the US dollar. The EUR / USD pair has managed to rally a bit from the more than two-week lows hit early Monday and was last seen trading just below the 1.1800 mark, still losing around 0.20% on the mark. working day.
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