ECB’s Panetta Warns Low Inflation Risks Require More Rate Cuts

The European Central Bank must continue to lower borrowing costs to keep inflation from undershooting, according to Governing Council member Fabio Panetta.

“Monetary conditions are still tight and new cuts will be necessary,” the Bank of Italy governor said on Thursday in Rome. “As inflation subsides, our focus should be on the sluggishness of the real economy: without a sustained recovery, inflation risks being pushed well below the target, opening up a scenario that would be difficult for monetary policy to counteract and should therefore be avoided.”