The president of the European Central Bank (ECB), Christine Lagarde, said that the new symmetric inflation target of 2% means that the level is not a ceiling. The ECB dropped its target “below, but close to 2%” in its strategic review announced Thursday.
The ECB president added that the effective lower bound is a constraint on symmetry and that losing the inflation target up and down is equally undesirable. Regarding the inclusion of housing costs, he stated that it would only cause a minimal spike in inflation.
Lagarde also said that a new “narrative-based” statement will replace the introductory words at the next press conference. The next meeting of the ECB is on July 22. He added that the Governing Council unanimously approved the changes.
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