Visco Calls for ECB To Remain Cautious, Criticises Colleagues' Eagerness to Hike
8 March 2023
By Xavier D’Arcy – FRANKFURT (Econostream) – European Central Bank Governing Council member Ignazio Visco said on Wednesday that monetary policy would have to move cautiously to protect financial stability and the fragile economy.
Speaking at a conference in Rome, Visco, who heads the Banca d’Italia, criticised statements made by other ECB policymakers pushing for further rate hikes.
In his prepared remarks, he said that ‘monetary policy will have to continue to move cautiously, guided by the data as they become available, so as to bring inflation back to the 2% target in the medium term, without jeopardising financial stability and minimising the negative effects on the still fragile recovery.’
‘However, it will be necessary to prevent the supply shock, which the dramatic conflict in Ukraine has made much more persistent than initially expected, from giving rise in the euro area as a whole to increases in labour costs and profit margins that are not consistent with a sufficiently rapid return to the price stability objective’, he said.
In unscripted remarks, he commented: ‘I do not appreciate the statements of my colleagues on prolonged rate hikes.’
Some members of the Governing Council have been explicit in calling for further rate hikes in May and beyond, despite the central bank's official commitment to a meeting-by-meeting, data-dependent approach.
He said that the economic outlook was cloudy: ‘the serious geopolitical situation makes it very difficult to predict future macroeconomic trends.’