ECBs Schnabel: Return to 2% target in a timely manner is becoming more and more likely

ECB’s Schanbel is speaking. Some highlights from her speech:

  • Monetary policy cannot solve structural problems
  • Return to 2% target in a timely manner is becoming more and more likely despite elevated services inflation and strong wage growth
  • Growth in the euro area has become increasingly uneven in recent years.
  • Monetary policy may contribute to rising heterogeneity, but it is not the main driver.
  • Structural headwinds are holding back growth in some countries more than others.
  • Signs of softening labor demand and progress in disinflation suggest inflation could sustainably fall back to the 2% target.
  • Elevated services inflation and strong wage growth persist.
  • Monetary policy alone cannot resolve structural issues.
  • European governments must turn current challenges into opportunities.
  • Europe has previously demonstrated its ability to adjust and rebound from adversity.
  • Escaping stagnation requires action at both national and European levels.
  • Focus on innovation, entrepreneurship, competition, and business dynamism is needed.
  • Strengthening the Single Market, improving access to private equity, and reducing bureaucracy are critical.
  • The green transition should be leveraged to advance innovation and regain price competitiveness.
  • Policies must incentivize labor participation and preserve a skilled workforce through immigration and education.
  • These efforts will strengthen the euro area.

This article was written by Greg Michalowski at www.forexlive.com. Source