ECB’s Wunsch: ‘My Take Is that We’re Essentially at Target’ in 2023, 2024

17 December 2021

By David Barwick – FRANKFURT (Econostream) – The European Central Bank’s price stability objective can be considered more or less achieved in 2023 and 2024, Governing Council member Pierre Wunsch said Friday.

In an interview with Bloomberg, Wunsch, who heads the National Bank of Belgium, was quoted as saying, ‘There’s a lot of uncertainty about 2023 and 2024, but my take is that we’re essentially at target. Whether you’re at target or just a little bit below or a little bit above doesn’t matter so much. What I’m a bit concerned about is the fact that we’d insist so much on still being below target.’

Regarding a faster pace of tapering than what was decided by the Governing Council last week, ‘that’s to me not the big issue’, he said. ‘The big issue for me is the narrative that doesn’t recognize enough that there seems to be an inflation issue in the world and we seem to see it very differently.’

‘We used to have low inflation rates and we were expecting to converge to the target’, Wunsch said. ‘But today is very different. Now we’re clearly above target. We have an average inflation over four years that’s clearly above 2%.’

According to the news agency, Wunsch said, that ‘[i]f we don’t believe that we’re going to have any kind of second-round effects, if we don’t believe our monetary policy is effective, at some point, we’re going to have a problem. Because otherwise we’re in a situation where we’re never going to exit.’