ECB’s Schnabel: Not So Concerned About Potential Divergency with the Fed

24 June 2024

By Isabel Teles – FRANKFURT (Econostream) – European Central Bank Executive Board member Isabel Schnabel on Monday said that she did not see a big risk in the ECB’s monetary policy diverging from that of the United States Federal Reserve.

During an industrial conference in Berlin, Schnabel was asked about the ECB and the Fed deciding differently about interest rates, to which she answered, ‘So far, this [divergence] hasn’t really played out that much. Actually, it’s quite interesting that the macroeconomy is not all that similar, but on the inflation side, it actually doesn’t look all that different. And this is why even though there may be a slight divergence, which is temporary, overall, I’m not so sure that it’s actually going to happen.’

If there was a major divergence between the two systems, the impact would be felt in mechanisms that would deal with it, such as exchange rates, and would be considered in further ECB decisions, she said.

‘[T]hat [impact] of course feeds again into our own analysis’, she said. ‘So I’m not so concerned.’