ECB's Coeure Says Forward Guidance Could Change, Just Not Yet
- For credibility’s sake, guidance must change if outlook does
- But euro-area inflation remains highly reliant on stimulus
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Benoit Coeure left the door open to changes in the European Central Bank’s planned path out of stimulus, but only when the inflation outlook improves.
Speaking just after euro-area data showed headline and core consumer prices slowing, the ECB Executive Board member said guidance that the next move in interest rates might be lower, and they will only be raised well after the end of quantitative easing, is still valid. Still, he also said the central bank must recognize that there are risks to sticking to that approach for too long.