European Central Bank Board member Schnabel speaking with Japanese media, Nikkei:
-
Says depending on incoming data rate cut in June may be appropriate
but path beyond June is much more uncertain - Recent data have
confirmed that the last mile of disinflation is most difficult - Based on current
data, rate cut in July does not seem warranted - With inflation risks
still being tilted to the upside, front-loading of easing process
would come with a risk of easing prematurely - We cannot pre-commit
to any particular rate path due to very high uncertainty - It’s virtually
impossible to quantify a change in the natural rate of interest in
real time with any reasonable degree of precision - The closer we get to
a potentially neutral level, and this could be well above 2%, we need
to move even more cautiously - 2% target has served
us well, a change in the target is not appropriate
-
Geopolitical shocks are a key risk that we need to watch, and this
poses upside risks to the inflation outlook -
Over the
longer run, geopolitical fragmentation would pose further upside
risks to inflation by reducing the efficiency and reliability of
global supply chains
Info via Reuters
This article was written by Eamonn Sheridan at www.forexlive.com. Source