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ECB’s Nagel: ‘Should Not Rush Into Anything on the Path to Monetary Policy Normalisation’

17 January 2025

ECB’s Nagel: ‘Should Not Rush Into Anything on the Path to Monetary Policy Normalisation’
Joachim Nagel, president of the German Bundesbank, at the European Central Bank Forum on Central Banking in Sintra on July 2, 2024. Photo by the ECB.

By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Joachim Nagel on Friday spoke out again in favour of a gradual approach to monetary policy easing.

In an interview with German financial news service Platow Brief, Nagel, who heads the German Bundesbank, said that December’s 25bp cut by the ECB was ‘appropriate, as shown by the inflation figures for Germany in December, which were again somewhat higher than the market expected.’

‘But I don't think it's bad that 0.5 percentage points are also being discussed’, he said. ‘That's part of it.’

The ECB’s ‘cautious approach is right given the high level of uncertainty’, Nagel said, observing that euro area inflation was still high.

‘Services prices in particular are continuing to rise dynamically’, he elaborated. ‘We should therefore not rush into anything on the path to monetary policy normalization.’