ECB’s Makhlouf: ‘Should Remain Open-Minded About the Rate Path’

30 January 2024

By Isabel Teles – FRANKFURT (Econostream) – European Central Bank Governing Council member Gabriel Makhlouf on Tuesday said that the next steps regarding interest rates should be taken with an unprejudiced and data-dependent approach.  

In a speech at the University College Cork, the text of which was published on the website of the Central Bank of Ireland, which he heads, Makhlouf said, ‘Looking ahead, we should remain open-minded about the rate path, which is the essence of data dependence. With disinflation well underway, we are confident in sustainably reaching our target of 2%.’

The latest Eurosystem’s staff projections saw headline inflation at 2.1% in 2025 and at 1.9% in 2026, he noted.

‘A broad-based disinflationary process is unfolding and is expected to continue during 2024 as the effects of past energy price shocks and other pressures fade. The pace of growth in labour costs will then be the dominant driver of core inflation’, he said.

Economic policy should create conditions of sustainable growth, he said. ‘That involves focusing on the fundamentals: price stability, prudent debt, a well-regulated and stable financial system, well-functioning and competitive markets.’