ECB’s Holzmann: Inflation Could Be Sticker Than Some People Are Assuming

22 March 2024

By David Barwick – FRANKFURT (Econostream) – The higher probability than often assumed that euro area inflation will prove sticky justifies monetary policy restraint, European Central Bank Governing Council member Robert Holzmann said Friday.

In remarks at the press conference presenting the 2023 annual results of the Austrian National Bank, which he heads, Holzmann said,‘Yes, such [a rate cut] is in preparation at European level.’

‘My personal view on this is that the timing cannot yet be determined because we are all committed to data dependency’, he continued.

The June data were unknown as yet, in particular the macroeconomic forecasts that would be based on the input of all the national central banks, he argued.

‘A decision is then made based on this’, he said. ‘My own assessment is that we need to exercise a little restraint here. But at European level, there is more optimism here than I share.’

It was evident from other Governing Council members’ statements that some members ‘believe that developments in June will probably be such that we get to a cut’, he said.

If that were the case, fine, he said.

‘It’s just that my judgement economically is that inflation may be stickier than a number of people think it is ... and I think if you look at the historical examples, and this is also shown in recent developments ... it's going to be a bit more difficult here’, he added. ‘So, I'm waiting for the June data and then we'll see.’