Economics
ECB Shouldn’t Exit Stimulus Before Gauging War Impact, Rehn Says
- Normalization is still ‘appropriate’ path for monetary policy
- Rehn warns premature tightening would risk euro-area recession
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The European Central Bank should take time to properly assess the implications of Russia’s war in Ukraine before continuing its exit from support for the euro-zone economy, according to Governing Council member Olli Rehn.
Rehn, who heads Finland’s central bank, said additional stimulus isn’t required given the continent’s robust rebound and strengthening labor market. Instead, “prudence and optionality” are warranted so premature monetary tightening doesn’t trigger a recession, he said.