ECB’s Nagel: ‘It Is Important to Be Cautious and Not Overreact’

13 May 2025

ECB’s Nagel: ‘It Is Important to Be Cautious and Not Overreact’
Joachim Nagel, president of the Deutsche Bundesbank, at the ECB International Women’s Day 2025 in Frankfurt on March 7, 2025. Photo by Adian Petty/ECB under CC BY-NC-ND 2.0.

By Marta Vilar – MADRID (Econostream) – European Central Bank Governing Council member Joachim Nagel said on Tuesday that it was crucial that the ECB be cautious and not overreact.

In a joint interview along with Banco de España Governor José Luis Escrivá given to Spanish daily El Mundo and German daily Süddeutsche Zeitung, Nagel, who heads the Deutsche Bundesbank, said that ‘[i]n monetary policy, it is important to be cautious and not overreact, giving undue weight to specific announcements that could change shortly afterward.’

The ECB kept improving its macroeconomic projections and scenario analyses, he said, which was the ‘best way’ to deliver monetary policy in the current juncture.

‘[W]e will continue to apply a data-driven approach, with decisions taken at each meeting, to set the appropriate monetary policy stance’, he said. ‘So far, this strategy has worked: euro area inflation has fallen to just above 2%.’

 

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