ECB’s Makhlouf: Job Not Done, But Nothing Likely to Go Wrong Now and No Need to Rush

18 November 2024

By David Barwick – DUBLIN (Econostream) – European Central Bank Governing Council member Gabriel Makhlouf on Monday said that while the ECB still needed to deal with inflation, it could do so without hurrying and with confidence that things were no longer likely to go awry.

Speaking at the Financial System Conference 2024 of the Central Bank of Ireland, which he heads, Makhlouf said, ‘I don’t think the job is done’ in terms of durably restoring price stability in the euro area.

‘I think the job is well on the way to being done, but I don’t think at the moment and I don’t feel the need to rush in any way to get the job done’, he continued. Rather, policymakers needed to ‘behave like a good long distance runner’ and ‘pace ourselves’, he said.

There was no point in ‘sprinting in some crazy fashion’, he said.

Makhlouf observed that services inflation was ‘still slightly high’, but argued that monetary authorities ‘should be confident that what we have done over the past few months’ was correct.

‘I don’t think anyone is thinking that inflation is going to move in the wrong direction’, he said.

In other comments, Makhlouf said of unconventional policy instruments, ‘When you get to negative interest rates, obviously it becomes a lot more complicated.’

The ECB ‘didn’t look enough’ in framework review at the effect of asset purchases on asset prices, he said. He was therefore ‘more of a slight sceptic’ and preferred not to have to deploy such tools, he said.