(Bloomberg) -- The European Central Bank is confident inflation will stabilize at its 2% target and monetary policy will cease to be restrictive in the first half of this year, according to Governing Council member Olli Rehn.
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The Finnish official said the ECB is vigilantly monitoring inflation, noting that further geopolitical tensions could stoke upward price pressures, such as via an increase in energy and transport costs.
Rehn said:
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“The threat of a trade war and the resulting disruption of international trade also pose a risk of rising prices”
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“On the other hand, inflation can surprise downwards as well if economic growth in the euro area does not start as expected”
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“The direction of monetary policy is therefore clear. The pace and scale of interest rate cuts are decided at each meeting separately based on the latest data and our overall assessment, looking at three factors in particular: inflation trends, core inflation dynamics and the strength of monetary policy transmission”
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“It is important to maintain freedom of action in monetary policy decision-making. In future meetings – the next time already next week – we should have more information about, for example, US trade policy and other decisions affecting the economy, and we can then reassess the line of our monetary policy”
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Click here for full text (in Finnish)
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