ECB's Kazimir: increasingly confident in disinflation path
FRANKFURT, Oct 21 (Reuters) -Euro zone inflation is increasingly likely to return to target next year but a bit more evidence is needed before the European Central Bank can declare victory, Slovak central bank chief Peter Kazimir said on Monday.
Kazimir, an outspoken conservative, was one of the few policymakers to openly express doubt about the need to cut rates this month, but he relented and eventually supported the move, the third policy easing step this year.
"If new data and forecasts confirm an accelerated pace in disinflation, we will be in a strong and comfortable position to continue the easing cycle," Kazimir said in a blog post.
Kazimir also argued that the ECB was waiting for moreevidence and until then, it had to keep an open mind about December and leave all options on the table.
"I'm increasingly confident that the disinflation path is on a solid footing," Kazimir said. "But the doubting Thomas in me still needs to see further proof of a sustainable return to target."
Markets currently expect the ECB to cut at each of its coming meetings through next March or even April, and for the 3.25% deposit rate to hit 2% sometime next year.
But Kazimir also warned that the long-awaited decline in wage growth and services inflation has yet to materialise and the ECB should await actual evidence of this happening before declaring victory.
"If new information points in the direction of higher inflation (risks), we can still slow down the pace at which we remove restrictions in the coming meetings," he said.
Reporting by Balazs Koranyi
Editing by Christina Fincher
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
