ECB’s de Cos: ‘Should Be Just as Concerned About Deviations Below the Inflation Target’

19 March 2024

By David Barwick – FRANKFURT (Econostream) –European Central Bank monetary authorities should care no less about deviations of inflation below the ECB’s price stability target than they do about overshooting it, Governing Council member Pablo Hernández de Cos said Tuesday.

In opening remarks at a conference in Madrid, de Cos, who heads Banco de España, highlighted the fact that the ECB’s latest projections showed medium-term price stability achieved and that headline inflation, along with ‘most’ core indicators, had continued to decelerate.

The projections were more trustworthy of late, monetary policy transmission was continuing apace and credit growth was still weak, he said.

‘In any case, we must continue to stress that the level of uncertainty remains high, which means that we must remain very attentive to the new information we receive and the implications it may have for the inflation outlook, and we will react depending on the data, without anchoring ourselves unconditionally to any monetary policy stance’, he said.

‘In this regard, it is important to recall the symmetric nature of our inflation target that we unanimously endorsed in our review of the monetary policy strategy in 2021’, he observed. ‘As we stated then, this symmetry means that we should be just as concerned about deviations below the inflation target as we are about deviations above it.’