Central Banks
ECB’s Tightening Path to Hinge on Inflation Outlook, de Cos Says
- De Cos cautions against ‘rapid convergence’ to 2% price goal
- More hawkish ECB officials are currently driving policy
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The pace and magnitude of monetary tightening by the European Central Bank will depend on its capacity to keep a lid on inflation expectations and reduce the spread of price increases beyond energy, said Governing Council member Pablo Hernandez de Cos.
The cut off of Russian gas flows to the continent will likely lead to a more prolonged and intense inflation bout that cannot be countered by a slowdown in activity only, said de Cos, who is also the head of the Bank of Spain.