ECB’s Nagel: Need to Stay Restrictive Until Price Stability Is Sustainably Achieved

25 July 2024

By Isabel Teles – FRANKFURT (Econostream) – European Central Bank Governing Council member Joachim Nagel on Thursday said that the ECB should keep its monetary policy stance restrictive until price stability was durably restored.

Speaking to journalists on the sidelines of the G20 Finance Ministers and Central Bank Governors' meeting in Rio de Janeiro, Nagel, who heads the German Bundesbank, said, ‘‘[Y]ou just have to be patient and, above all, keep your monetary policy in restrictive territory until inflation has reached a stable level of 2%.’

The ECB was not on ‘autopilot’ when deciding to cut interest rates, he said. It might be possible to ease monetary policy further if data remained stable in the coming months, he suggested.

‘If the figures remain the same over the next twelve months, there might be a chance that we can reduce interest rates further at one or the other meeting’, he said.