ECB’s Makhlouf: ‘Open-Minded About the Path of Our Policy Rates’

14 February 2024

By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Gabriel Makhlouf on Wednesday described himself as open-minded with regard to what happens with ECB interest rates.

In prepared remarks before a committee of the parliament of the Republic of Ireland, Makhlouf, who heads the Central Bank of Ireland, said that previous monetary policy decisions had yet to pass through fully.

‘With disinflation well underway, we are confident in sustainably reaching our target of 2%’, he said. ‘Policy rates are now at levels that, if maintained for a sufficiently long duration, will make a substantial contribution to bringing euro area inflation back to target.’

‘Although uncertainties remain, it is clear that our monetary policy decisions are working’, he added. ‘Finally, and for the avoidance of doubt, I remain open-minded about the path of our policy rates.’

The euro area was facing short-term economic stagnation, he said, but would gradually recover during the current year. Disinflation would also continue, leaving labour costs the main driver of core inflation, he said.