ECB’s de Cos: Impact of Past Rate Hike a Downside Risk to Growth Outlook

20 March 2024

By David Barwick – FRANKFURT (Econostream) – Monetary policy could have a greater dampening effect on economic activity than anticipated, European Central Bank Governing Council member Pablo Hernández de Cos said Wednesday.

In remarks at the ECB Watchers Conference, de Cos said that ‘a stronger than expected monetary policy impact remains a downside risk to the euro area growth outlook, as mentioned in our last monetary policy statement.’

‘Thus we shall be closely monitoring the materialisation of such risks and calibrate accordingly the degree of monetary restriction, in particular in a context in which our staff projections are currently anticipating a gradual return of inflation towards our 2% symmetric target in the medium-run and with the risks to the inflation outlook being, in my view, balanced’, he added.