The chief economist of the European Central Bank, Philip Lane, said on Thursday that the key message from the February meeting was that risks to inflation are tilted to the upside in the near termas reported by Reuters.
Lane has said that most of the current inflation was an imported inflation shock, given that there has been no boom in domestic demand. A) Yes, gradualism makes sense in this scenariohe added, saying that if inflation settles at around 2.0% in the medium term, the policy path is different open, but will not require a significant adjustment cycle.
The size and frequency of rate movements will depend on the inflation regimehe added, noting that other increases are possible beyond 25 basis point moves.
market reaction
The euro has not reacted to Lane’s latest comments, with currency markets more focused on escalating geopolitical tension in Eastern Europe at the moment.
Source: Fx Street
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