ECB’s de Guindos: Monetary Policy to React to Disinflation in Due Time

29 January 2024

By Isabel Teles – FRANKFURT (Econostream) – European Central Bank Vice President Luis de Guindos on Monday said that inflation had been on a positive path and that monetary policy would reflect this in due time.

In an interview with Spanish radio station RNE, de Guindos said, ‘There has been good news regarding the evolution of inflation, and that — sooner or later — will end up being reflected in the monetary policy.’

The date of the first interest rate cut would be determined by how inflation evolved towards the 2% target, he said.

‘We are going to be dependent on the data, we don’t have any kind of calendar, it will depend on the evolution of inflation, and I am optimistic regarding the evolution of inflation.’

The return to ‘the era of deflation and negative rates’, was difficult and unlikely, he said.

Preliminary data to be released this week by Eurostat would show whether the euro area faced a technical recession, which de Guindos did not rule out.

‘What I would tell you is that the recession is not going to be deep and that the labour market is holding up’, he said.