Free Trial

ECB’s Rehn: Current Situation Good, But Medium-Term Downside Risks Visible

8 October 2025

ECB’s Rehn: Current Situation Good, But Medium-Term Downside Risks Visible
Olli Rehn, governor of the Bank of Finland, at the 8th ESRB annual conference in Frankfurt on September 27, 2024. Photo by Adrian Petty/ECB under CC BY-NC-ND 2.0.

By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Olli Rehn on Wednesday warned of medium-term downside risks to price stability.

In remarks to Finnish podcast Karon Grilli, Rehn, who heads the Bank of Finland, said that the ECB was now “roughly” at its 2% inflation target. “In that sense, the situation currently is good,” he said.

“However, over the next couple of years, downside inflation risks are apparent, due, among other things, to the appreciation of the euro and the stabilization of wage and services inflation,” he said.

Noting the high prevailing uncertainty related to geopolitical developments and trade tensions, Rehn said the Governing Council had to stick to its meeting-by-meeting, data-driven approach in setting monetary policy.

In other comments, he warned of risks associated with stablecoins. “If the stablecoin market grows significantly, they could become a significant financial stability risk,” he said.