Economics
ECB Mustn’t Overreact to High Near-Term Inflation, Chief Economist Lane Warns
- Important for ECB to be seen as ‘symmetric’ in its commitment
- Says currently high inflation is not expected to persist
Philip Lane
Photographer: Alex Kraus/BloombergThis article is for subscribers only.
The European Central Bank must be careful not to overreact to high near-term inflation, chief economist Philip Lane said, arguing that an aggressive response could lead to too-weak price pressures down the line.
It’s crucial to prevent “an excessive monetary tightening that pushes inflation persistently below the 2% target over the medium term,” Lane said at a virtual event hosted by MNI on Thursday. To reach their goal, policy makers also shouldn’t underreact to emerging risks.