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ECB Comment Recap: Broad Support for Rate Hold, Some Debate on Response to Inflation Deviations

12 December 2025

ECB Comment Recap: Broad Support for Rate Hold, Some Debate on Response to Inflation Deviations
ECB building in Frankfurt during the Europa Open Air on August 22, 2025. Photo by the ECB under CC BY-ND-NC 2.0.

ECB Comment Recap: Broad Support for Holding Rates, Some Debate Persists on Response to Inflation Deviations

By Marta Vilar – MADRID (Econostream) – Following is a collection of views expressed by ECB Governing Council members on various topics of high relevance related to next week’s meeting and the further evolution of monetary policy:

 

Hold / Rates Appropriate:

 

Hold, but Data-Dependent / Conditional

  • Banque de France Governor François Villeroy de Galhau – 5 December: “We are, as President Christine Lagarde has observed, ‘in a good place’. But a good position is not a comfortable one nor a fixed one, as I will discuss today.”
  • Latvijas Banka Governor Mārtiņš Kazāks – 2 December: “given the credibility that we have, we can be much more considered and less jumpy in terms of our decisions.”
  • Latvijas Banka Governor Mārtiņš Kazāks – 2 December: “The only thing I can say very clearly is that currently available data do not, in my view, warrant a strong discussion on changing the policy rates … We are in a good place. Given all the information that I currently have on where inflation is and how it’s likely to develop going forward, I think 2% is appropriate for the situation. What happens further? We’ll see.”
  • De Nederlandsche Bank President Olaf Sleijpen – 25 November: “I think we are still in a good place … maybe one should describe it as a conditional good place,” given that circumstances could always change.
  • Deutsche Bundesbank President Joachim Nagel – 24 November: “We are in a good position and should continue to follow a data-dependent and flexible approach and take our decisions on a meeting-by-meeting basis. In December, we will have additional data, new projections for the next two years and also – for the first time – for 2028. We will then see more clearly whether the monetary policy stance remains appropriate.”
  • Eesti Pank Governor Madis Müller – 21 November: Interest rates are “right now in the place where it’s consistent with the economic cycle and the outlook for the inflation. But having said that, of course, we always have to remain vigilant, because you don’t know what will happen”
  • Austrian National Bank Governor Martin Kocher – 12 November: “If there is no change in what we’re seeing – a big ‘if’ given the risks – then you would have to come up with good arguments for changing the policy stance.”
  • Central Bank of Malta Governor Edward Scicluna – 11 November: As long as we have a balanced between all these” economic factors, “but at the same time a resilient economy,” the need to adjust monetary policy is not apparent.
  • ECB Vice President Luis de Guindos – 10 November: “Even though the level of uncertainty has decreased compared with six months ago, we need to take a very prudent and cautious approach to our monetary policy … If inflation developments deviate, or if projections are modified, and if transmission is not correct, then we may change [the level of interest rates]. But so far, we firmly believe that the level of interest rates is correct.”
  • Banque de France Governor François Villeroy de Galhau – 31 October: “This is a sound position, but of course, it is not a fixed one. Faced with various risks, including those emanating from the financial markets, we must maintain full flexibility to act as needed. More than ever, agile pragmatism, based on data and forecasts, will be essential in our upcoming meetings.”
  • Latvijas Banka Governor Mārtiņš Kazāks – 31 October: “If we see that we need to move, then we move – but we don’t need to be jumpy. The steadiness of our policy decisions is an advantage.”

 

Open to Change if Needed

 

 

Shock-Contingent Action

 

Room to act:

 

Next move in either direction:

  • Latvijas Banka Governor Mārtiņš Kazāks – 2 December: “I would not speculate [about a cut and a hike being equally likely to be the next move]. More generally, though, the current outlook sees inflation below 2% early next year, and if there were a negative shock on top of this, the the outcome would be a greater deviation from target to the downside that could argue for a policy reaction. On the other hand, a shock of similar magnitude to the upside could put inflation closer to 2%, leading to a less immediate need to move. In purely theoretical terms, if two shocks were equal in sixe but opposite in direction, the negative one would make a cut more likely than the positive one would make a hike, because the downside deviation from target is larger than the upside deviation. But this by no means says that the next move will be a cut. We simply don’t know.”
  • Croatian National Bank Governor Boris Vujčić – 25 November: “I don’t have a special scenario in mind for a rate cut or rate hike. Everything is circumstantial.”
  • Central Bank of Ireland Governor Gabriel Makhlouf – 17 November: “My thinking on that [previous comments about next move potentially being either a cut or a hike] has not changed … I am open-minded.”
  • Austrian National Bank Governor Martin Kocher – 12 November: “If you’re consistent with the data-dependent approach and think pre-commitment is not good under high uncertainty, then you must be ready to draw the appropriate conclusion from developments, whether they imply cutting or hiking. For markets it’s a bit unusual, but when you’re at the end or very near the end of a cycle, it’s logical that moves can go in either direction.”
  • National Bank of Slovakia Governor Peter Kažimír – 3 November: “It means our next move – when it comes – could, in principle, be in either direction, depending on the signals we receive. Any automatic pilot is off the table.”

 

Another rate cut:

  • Bank of Finland Governor Olli Rehn – 8 December: “I don’t think so [that the option of cutting is being excluded ahead of time]. Personally, I am trying to walk the talk, which is sticking to the principles of full optionality, full freedom of action, and moving forward meeting by meeting. And we will all certainly be much better informed in December once we get the forecast and have the monetary policy book at our disposal, providing the necessary analytical raw material for our decisions.”
  • Bank of Finland Governor Olli Rehn – 7 December: The Governing Council should avoid imposing “unnecessary straightjackets” such as a presumed high bar for cuts.
  • ECB Executive Board member Piero Cipollone – 4 December: “There are still many risks in the pipeline. For example, we haven’t seen the full effect of tariffs on the European economy. We know that there is pressure on the import side from the Chinese goods that are being redirected from the United States to Europe. The financial boost coming from higher expenditure, especially in Germany, might not manifest itself with the intensity that we are expecting. For the recovery of consumption, we are assuming that the savings rate will go down, but this assumption has yet to be tested. If it doesn’t materialise, we will need to act.”
  • Latvijas Banka Governor Mārtiņš Kazāks – 27 November: “Given the data we have received up to now, I don’t think the time is ripe for discussing a rate cut.”
  • Austrian National Bank Governor Martin Kocher – 12 November: “As long as nothing changes in terms of the projections, then the arguments requires to cut might be more demanding … What would such a cut [an insurance cut] insure us against, actually? The impact of 25bp in the current economic environment is rather small, and everybody knows that.”
  • Bank of Greece Governor Yannis Stournaras – 5 November: You will see most of the arguments are in favor of inflation and growth becoming lower but despite that we don’t jump to the conclusion that we should cut in the next meeting … So, why should we reduce interest rates? This is one question. If it continues to become weaker, okay, then we will consider it.”
  • Austrian National Bank Governor Martin Kocher – 3 November: “It’s no secret that there are a few members of the ECB Governing Council who could imagine another rate cut.”

 

End of easing cycle:

 

Hikes:

  • Banque de France Governor François Villeroy de Galhau – 10 December: Given the present circumstances, there is “really no reason” to expect a hike in the short term, contrary to market speculation.
  • Bank of Lithuania Governor Gediminas Šimkus – 10 December: There is “no evidence” of inflation rising above the 2% goal, and “what the past few years have taught is not to outline the very distant perspective and to say things will happen this or another way.”
  • ECB Executive Board member Isabel Schnabel – 8 December: “I’m rather comfortable with those expectations [for the next move to be a hike] … At this point in time this [the possibility of a first hike in June 2026] remains very uncertain. This is not currently on our minds. We’ll cross that bridge when we come to it … If the economy is proving more resilient and demand is recovering more quickly than expected, this would also tend to bring forward the potential need of a rate hike.”
  • Austrian National Bank Governor Martin Kocher – 12 November: “[Getting through all 2026 without starting to hike rates would] not [be] too surprising. I mean, if the inflation outlook remains similar to what we foresee and if GDP projections remain similar, then there might be a longer period of time at the current rate.”

 

ETS 2:

  • Bank of Finland Governor Olli Rehn – 7 December: the effect of ETS 2 should not be overstated because its impact is mostly on the price level and is uncertain.
  • Banque de France Governor François Villeroy de Galhau – 5 December: “The postponement of ETS 2 to 2028, voted by the European Parliament, will also post-pone its inflationary impact of around a 1/4 of percentage point from 2027 to 2028.”
  • Latvijas Banka Governor Mārtiņš Kazāks – 2 December: “Both elements are important [the timing and impact of ETS 2], because the speed of adjustment also matters. It’s like with exchange rates: it’s not only the level that matters, but the speed with which it is reached. So, this is one of the variables that we need to continue to monitor, because its estimated impact on inflation is of significant magnitude. Our September projections – as well as our Spring ones – estimated the impact on 2027 inflation at 0.3 percentage point, so it’s not a small element.”
  • Croatian National Bank Governor Boris Vujčić – 25 November: “If not too large, this is an example of something that has one-time effect on inflation. If it is not too large and therefore does not propagate into further price increases, I think we should not make too much out of it.”
  • Central Bank of Ireland Governor Gabriel Makhlouf – 17 November: “Our latest projections show us to be on track. I wouldn’t get too obsessed about what might or might not happen with ETS 2.”
  • Austrian National Bank Governor Martin Kocher – 12 November: “If it’s introduced, it will have a one-time inflationary effect for one year and then drop out of annual inflation, unless the cost increases. I personally think that this issue is getting a bit too much attention. We’re talking about a very modest effect on inflation. The December projections will tell us more about it. Perhaps we’ll see also different scenarios based on how ETS 2 is rolled out.”
  • Bank of Greece Governor Yannis Stournaras – 5 November: “The impact of any mitigation or delay in the implementation of the EU's ETS 2 emissions trading system on the projections is unlikely to be large enough to change the picture, given that it would be a one-off impact.”
  • ECB President Christine Lagarde – 30 October: “I don't think I would read too much, again, into an expected delay of the implementation of ETS 2. And when I speak to colleagues at the European Commission, they are still strongly of the view that ETS 2, which is committed, must proceed, and the deadline for implementation is still 2027. What, on the other hand, is being discussed and has been put on the table by Commissioner Wopke Hoekstra, is a slight smoothing in the implementation of ETS 2, which means that the impact might be spread a little bit more over time, possibly a bit less in 2027 and a bit more in 2028.”

 

Market expectations:

 

Inflation projections:

  • Bank of Finland Governor Olli Rehn – 8 December: “I’m particularly interested in seeing the December projections for both growth and inflation, and in seeing financial conditions. It’s important to see whether inflation is projected stabilize around 2% over the medium-term horizon … I always take our economic forecasts seriously, as we all do. Of course, further out there’s more uncertainty. But we do medium term forecasts because our strategy is defined over the medium term. We have been able to utilize this information meaningfully in the past, and that’s what we will do this time.”
  • Bank of Finland Governor Olli Rehn – 7 December: Slightly weaker dynamics in 2027 and the introduction of a 2028 projection would clarify the medium-term path.
  • Latvijas Banka Governor Mārtiņš Kazāks – 2 December: “Soon we will have a first projection for 2028. That is a very important piece of information to digest, analyze and discuss. But a projection three years out under current uncertainty is subject to very wide confidence intervals. So, I would not consider the 2028 forecast a reason in itself for us to act or not act. I would pay much more attention to 2026 and 2027 to shape monetary policy decisions. Our forecasts have improved, and one year ahead is much more precise than three years. Also, monetary policy is more effective over a horizon of 12 to 25 months. So, aiming at an uncertain target three years in the future would not make sense.”
  • Deutsche Bundesbank President Joachim Nagel – 1 December: The December forecasts, including the initial outlook for 2028, would help the ECB assess “whether we are still on track to meet our medium-term inflation target.”
  • Latvijas Banka Governor Mārtiņš Kazāks – 27 November: the 2026 and 2027 projections due in December will carry far more weight than the 2028 figure, which will have “a wide margin of error” given both its distance and the current level of uncertainty.
  • Croatian National Bank Governor Boris Vujčić – 25 November: “Thinking two or three years ahead, you always have increasing uncertainty. We better stick to the more visible future and make sure that the data we get is consistent with our projections. If they are, we are fine.”
  • Central Bank of Ireland Governor Gabriel Makhlouf – 20 November: “If the projections are at 1.8%, I'd be less worried about it.”
  • Austrian National Bank Governor Martin Kocher – 6 November: “You always have to take projections with a grain of salt. And the further away the projection horizon, the larger the grain of salt.”
  • Bank of Lithuania Governor Gediminas Šimkus – 3 November: December projections are “very important”, especially the 2028 number.
  • Austrian National Bank Governor Martin Kocher – 3 November: “2028 [projection] will be interesting, that is a difficult projection” given it is so far in the future. “It is much more important that we have somewhat more clarity about 2026 and 2027.”
  • Latvijas Banka Governor Mārtiņš Kazāks – 31 October: “The 2028 forecast will be very important to look at, to see where inflation dynamics are going, but I would not overestimate the importance. Uncertainty remains high and is unlikely to disappear, so forecasts will come with a very large margin of error.”
  • Austrian National Bank Governor Martin Kocher – 31 October: “To be honest, the 2028 projection is of course a projection that is far out in the future. So, putting too much weight on this projection, on this single data point, I think would not be appropriate. It’s more about the less uncertainty that we have about 2026 and 2027.”
  • Bank of Lithuania Governor Gediminas Šimkus – 31 October: “If we look at the medium term, the projected indicators are aligned with the 2% target.”

 

Deviations from inflation target:

  • Latvijas Banka Governor Mārtiņš Kazāks – 10 December: “Temporary undershoot of headline inflation mainly due to energy and food prices, later introduction of ETS 2”
  • National Bank of Slovakia Peter Kažimír – 8 December: “The projected undershoot doesn’t worry me at all. There is no need to react to small deviations, especially if they are because of energy … Trying to overengineer policy around small bumps in inflation would actually create uncertainty.”
  • Bank of Finland Governor Olli Rehn – 8 December: “Our target is indeed symmetric, so upside and downside deviations are equally undesirable. Its medium-term focus lets us look through small or temporary deviations. This is conditional on medium term inflation expectations staying well anchored. We have a very strong commitment to symmetry.”
  • ECB Executive Board member Isabel Schnabel – 8 December: “Let’s face it, the deviations that we are talking about are very small. A couple of years ago we saw deviations of completely different magnitudes. And it’s not sufficient to just look at the numbers. If there is a deviation we need to analyze the reasons for it and see if there’s a risk that it might become sustained. And that of course applies in both directions, given our symmetric inflation target … Assuming these deviations [in 2026 and 2027] were small, I would not be concerned in the current macroeconomic environment.”
  • Bank of Finland Governor Olli Rehn – 7 December: “if deviations from target remain small and are not long-lasting, then they do not necessarily justify any particular action.”
  • Banque de France Governor François Villeroy de Galhau – 5 December: “Positive and negative deviations from 2%, if lasting, are equally undesirable. Let me be clear: we are not ‘keeping our powder dry’ to create a buffer with the effective lower bound … Second, some might think that we should react only to large deviations from the target and ignore small ones. But as I already stressed ix, what matters is not the size of the deviation, it is whether it is temporary or persistent. Even small but lasting deviations can affect the anchoring of inflation expectations. This is why we need to analyze thoroughly the effect of each shock, to decide whether to look through or act pre-emptively. Agility is not excessive policy activism, but it is not stickiness either.”
  • ECB Chief Economist Philip Lane – 3 December: “In particular, an intermediate-category broad-based inflation deviation likely calls for an incremental adjustment in the monetary stance … However, if the origin of the inflation deviation is a supple-driven relative price level shock, the case for an active monetary policy response is more nuanced.”
  • Eesti Pank Governor Madis Müller – 26 November: “We shouldn’t let ourselves be swayed too much, even if in the short term we’re a little under 2%.”
  • Croatian National Bank Governor Boris Vujčić – 25 November: “We should not try to micromanage inflation. If we don’t see persistent pressure for inflation to come up or down, we should not change interest rates. If you don’t see large enough persistent deviation or an increasing downward trend, then it is fine.”
  • Central Bank of Ireland Governor Gabriel Makhlouf – 20 November: “I'm completely relaxed about what's going to happen, with what the numbers are showing for next year, because it's coming back the following year. We should be very cautious about reacting to small deviations in the projections … expectations are anchored."
  • De Nederlandsche Bank President Olaf Sleijpen – 17 November: the projected undershoot of inflation does not on its own warrant another rate cut, as inflation expectations remain steady.
  • ECB Executive Board member Isabel Schnabel – 12 November: “if you look at what's driving this undershoot of inflation, it's mainly related to the very volatile energy prices and part of that is base effects from energy prices. So, one really has to look very carefully. But in spite of that in our most recent projections even headline inflation was back at 2% at the end of the projection horizon. But I think the main focus actually should be on underlying inflation, core inflation. There we have a much smaller undershoot and actually also there in the medium term you see this convergence towards the 2% and what really matters is the underlying narrative.”
  • Austrian National Bank Governor Martin Kocher – 12 November: “any resulting deviation [due to ETS 2] from our target should be mild. I would not be too concerned if we’re one or two tenths of a point above or below; that’s normal. You cannot, of course, expect to always hit the target exactly.”
  • ECB Executive Board member Frank Elderson – 11 November: “Our price stability objective is symmetric, and we are equally concerned about upward and downward deviations.”
  • ECB Vice President Luis de Guindos – 6 November: Any undershooting would likely be short-lived, “it is impossible to be at 2% continuously all the time, but you can have some levels a little but above, a little bit below. But in general terms, I think that the convergence to the 2% without any overshooting or undershooting is now the main, the baseline scenario for our projections.”
  • Bank of Greece Governor Yannis Stournaras – 5 November: “When it [actual inflation] starts becoming less than 2%, call me again.”
  • Banque de France Governor François Villeroy de Galhau – 5 November: “We said in our strategy review in 2021 that our aim is symmetric; … in 2025 we confirmed the symmetric aims, that our reaction function is symmetric. Full stop.”
  • Deutsche Bundesbank President Joachim Nagel – 5 November: Inflation is “pretty close to our target” and will return to 2%, despite being below that level for part of 2026.
  • Bank of Lithuania Governor Gediminas Šimkus – 3 November: Inflation is currently hovering around 2% and likely to remain near that level, with any deviations being “marginal differences” rather than “fundamental” ones.
  • National Bank of Slovakia Governor Peter Kažimír – 3 November: “I would not read too much into small deviations from a desired path or start ringing the alarm bells prematurely … Our job is to remain vigilant to risks of persistent deviations on both sides of our target and be prepared to respond if incoming data signal that such risks are intensifying.”

 

Economic growth:

 

Growth risks:

  • Bank of Lithuania Governor Gediminas Šimkus – 10 December: Risks to growth and inflation are “fairly balanced.”
  • ECB Executive Board member Isabel Schnabel – 8 December: “Compared with our September projections, the risks are clearly tilted to the upside. And while I have not yet seen the new projections due for release later this month, I would expect them to reflect this.”
  • ECB Executive Board member Piero Cipollone – 4 December: “Compared with the last Governing Council, it seems to me that risks around the central projection are more balanced. You may remember there was some concern that the economy could do worse than projected in the main scenario. But the economy has been resilient.”
  • ECB President Christine Lagarde – 3 December: “Risks to the outlook have become more balanced thanks to the EU-US trade deal reached over the summer, the ceasefire in the Middle East and progress in the US-China trade negotiations. At the same time, the outlook remains uncertain – owing to a still volatile global trade environment, a potential deterioration in financial market sentiment and geopolitical tensions.”
  • Croatian National Bank Governor Boris Vujčić – 25 November: Inflation and growth risks appear balanced
  • ECB Vice President Luis de Guindos – 21 November: Growth risks are now balanced, and data could surprise in either direction
  • Austrian National Bank Governor Martin Kocher – 12 November: “Hopefully we won’t see downside risks materialize, as some would be very detrimental to growth. But given recent data, a somewhat stronger growth outlook is not impossible.”
  • ECB Executive Board member Frank Elderson – 7 November: Some downside risks to growth “have been mitigated”.
  • Bank of Greece Governor Yannis Stournaras – 4 November: Euro area growth prospects remain subject to “multiple downside risks.”
  • Bank of Finland Governor Olli Rehn – 4 November: “Uncertainty, as measured by various indicators, has declined from its peak levels. However, uncertainty about future economic developments remains elevated and risks are tilted to the downside. Prolonged uncertainty, protectionism and disruptions related to labor availability are holding back global economic growth. In addition, public debt, potential corrections in financial markets and weakening institutions may threaten economic stability.”
  • Banque de France Governor François Villeroy de Galhau – 31 October: “In a highly uncertain environment, we have just received two pieces of good news for the French economy: resilient growth in the third quarter at +0.5%, thanks to the commitment of entrepreneurs and the French working population; and very well-controlled inflation at 0.9% at the end of October (harmonized index), which is boosting purchasing power.”
  • Latvijas Banka Governor Mārtiņš Kazāks – 31 October: “Risks to growth [are more balanced] as well because some – including those related to trade – have diminished for now. But I would still say that they’re tilted somewhat to the downside.”
  • ECB President Christine Lagarde – 30 October: “some of the risks which have faded or have been alleviated in the last few weeks, and the impact that it has had in particular. So we start with the EU-US trade deal reached over the summer. We follow with the recently announced ceasefire in the Middle East. And we continue with the announcement today, this morning actually, of progress in the US-China trade negotiations. And we continue with: these components have mitigated some of the downside risks to economic growth. So if you remember last time in September, I said that the risk to growth was more balanced, and the range had narrowed. I think this time around we acknowledged that some of the downside risks to growth have abated, and we specifically mentioned these three.”

 

Inflation risks:

 

Incoming data:

 

Impact of US-China trade war:

  • Latvijas Banka Governor Mārtiņš Kazāks – 10 December: “The Chinese story in terms of exports to Europe is only going to get worse, and that, of course is going to have monetary policy implications. As we say, it’s going to get worse before it gets better … So, the gap is widening, and the question is going to be how economic policymakers react. It will certainly have a deflationary element, and it may destroy some of industrial jobs here as well.”
  • ECB Executive Board member Isabel Schnabel – 8 December: “potential trade diversion from China has been weaker than expected.”
  • Banque de France Governor François Villeroy de Galhau – 5 December: “There are downside risks as well: a greater deceleration of wage growth, a stronger euro, and cheaper imports from China. Over the latest six months this year compared to the same period last year (May-to-October 2025 vs 2024), Chinese imports in the euro area increased by 11% in volume, and their price decreased by 9%. To give an order of magnitude, the last two phenomena could reduce inflation by about 0.2 percentage point in 2027 according to Banque de France estimates.”
  • ECB Executive Board member Piero Cipollone – 4 December: “There are still many risks in the pipeline. For example, we haven’t seen the full effect of tariffs on the European economy. We know that there is pressure on the import side from the Chinese goods that are being redirected from the United States to Europe.”
  • ECB Chief Economist Philip Lane – 26 November: “we have the deflationary effect of Chinese exporting firms lowering their prices.”
  • ECB Chief Economist Philip Lane – 26 November: “Let me also say that when you think about the export sector, it’s this two-sided squeeze. It’s the squeeze from the tariffs vis-à-vis the US, but it’s also the squeeze from the rise of China as a greater rival in export markets for European firms.”
  • ECB Vice President Luis de Guindos – 21 November: China has gained notable competitiveness and now shares a very similar export profile with Europe. Chinese domestic prices have fallen by 5% and the renminbi has weakened by 10%, and warned that increased imports of Chinese industrial goods could have significant implications for growth and inflation.
  • ECB Executive Board member Isabel Schnabel – 12 November: “if you ask me as an economist what I believe geopolitical fragmentation would mean for inflation, I would say it's rather inflationary than disinflationary. And of course, maybe the most obvious expression of that is any kind of supply chain disruption that may occur as we've seen it for rare earths … There was this fear about trade diversion from China, so basically China flooding the euro area with cheap goods. And I must say so far, this risk hasn't really materialized. And actually exports from China to the EU actually are now going down.”
  • Austrian National Bank Governor Martin Kocher – 12 November: “As for inflation, this [reroute of Chinese goods] might go in either direction. It might have a disinflationary effect via cheaper imports, but in the other direction, bottlenecks could force firms to invest more in diversification or to buy goods that are more expensive. But things can change quickly, and now China and the US have announced an interim trade agreements, so let’s see to what extent this rerouting of trade flows continues.”
  • Croatian National Bank Governor Boris Vujčić – 11 November: Main sources of risk are the rerouting of Chinese goods, US tariffs and uncertainty around household spending
  • ECB Vice President Luis de Guindos – 6 November: “And finally, another element that we will have to take into consideration is the tremendous increase in competitiveness of Chinese products, and how this is going to have an impact on growth and inflation.”
  • Eesti Pank Governor Madis Müller – 31 October: “The impact of such export restrictions [rare earth restrictions] is different from that of tariffs, as it causes direct disruptions in supply chains and raises the prices of specific goods. We all have fresh memories of a similar situation during the coronavirus pandemic.”

 

Food inflation:

  • ECB Executive Board member Isabel Schnabel – 8 December: “Food price inflation has come down but remains elevated. And central banks tend to be concerned about persistently high food inflation because it has a strong impact on consumer inflation expectations. Our Consumer Expectations Survey shows that inflation expectations, across all horizons, are higher now than a year ago.”
  • Central Bank of Ireland Governor Gabriel Makhlouf – 25 November: “I do worry a bit about what I see happening to food inflation. But expectations appear to be pretty well grounded. People understand that we’re absolutely committed to delivering on our 2% target in the medium term.”
  • Deutsche Bundesbank President Joachim Nagel – 24 November: “However, some aftereffects of the wave of inflation are still being felt. Take supermarket inflation, for example. For food, in particular, price increases were above average and remain persistent. The ECB recently wrote that to put a meal on the table, consumers are paying roughly a third more than before the pandemic. At their regular trips to the supermarket, people perceive the increased cost of living particularly clearly. And their concerns about further price rises are reflected in survey results.”
  • ECB Executive Board member Isabel Schnabel – 12 November: “we look very carefully at food prices, and food price inflation is still pretty strong as in many other countries. And food price inflation is important because it is so salient that it has kind of a very strong impact also on inflation expectations of households. And therefore, it's so important.”
  • Eesti Pank Governor Madis Müller – 31 October: “food prices have risen faster than the average price increase for other goods and services over the past few years.”

 

Core, services inflation and wage growth:

 

Transmission of monetary policy:

 

Defense and infrastructure spending:

  • ECB Executive Board member Isabel Schnabel – 8 December: “the decline in core inflation has stalled at a time when the economy is recovering, the output gap is closing and fiscal policy is expanding, all of which would tend to be inflationary. This has to be monitored very carefully.”
  • Banque de France Governor François Villeroy de Galhau – 5 December: “There are upside risks on inflation, such as global value chain fragmentation, and public spending in defense and infrastructure in Germany.”
  • ECB Executive Board member Piero Cipollone – 4 December: “The financial boost coming from higher expenditure, especially in Germany, might not manifest itself with the intensity that we are expecting.”
  • Austrian National Bank Governor Martin Kocher – 12 November: “Some of it [German higher fiscal spending] will be seen in the data in 2026, but it will probably take until 2027 to fully take effect. Infrastructure investments take time, and preparation for specific projects will take at least several months, even one or two years. Defense spending is harder to assess. It depends on sourcing and this on potential capacity constraints in production in Europe. If at all, the effect might lead to slightly higher prices. But it will develop over time, so I don’t expect a strong effect that unfolds very quickly.”
  • ECB Executive Board member Frank Elderson – 11 November: “Yes, it could enhance growth. It all depends on how investments are structured. Some investments, like spending on infrastructure, could have a larger positive effect on growth than others.”
  • ECB Executive Board member Frank Elderson – 7 November: Higher defense spending will boost aggregate demand, but how funds are allocated would determine whether the increased spending fosters innovation, productivity or economic growth.
  • Eesti Pank Governor Madis Müller – 31 October: “Going forward, it will be important to see how much additional investment European governments make in infrastructure and defense in the near future. Such spending usually gives the economy a little extra boost, but it can also accelerate price increases.”

 

Tariffs:

  • ECB Chief Economist Philip Lane – 26 November: Impact of US tariffs is “clearly negative” … effects should not be expected to appear “in year zero,” as some frontloading had taken place before implementation.
  • ECB Vice President Luis de Guindos – 26 November: “in the short term higher tariffs are going to be disinflationary and simultaneously they are going to depress growth”, but “in the medium or longer term that situation could change because of fragmentation,” which could raise business costs and generate inflationary pressure.
  • ECB Executive Board member Isabel Schnabel – 12 November: “And if we see what happened and what we had projected [in terms of the impact from tariffs], there is indeed a pretty big difference. One thing that happens and that's disturbing a bit the data is that we have this massive front-loading. But then we didn't see a complete reversal of the front-loading later, but we actually did see that there is a positive underlying momentum in the euro area economy. And what has happened is that domestic demand has compensated for the weakness in exports. And that is actually very important. And then of course the uncertainty has come down quite strongly.”
  • Austrian National Bank Governor Martin Kocher – 6 November: Tariff-related shifts in supply chains might dampen prices if production moved toward Europe, while geopolitical frictions might instead restrict supply and lift costs.
  • Bank of Finland Governor Olli Rehn – 31 October: “The impact of the tariffs on growth and inflation in the euro area is still uncertain. The effects on growth are negative, and even in the case of inflation, it seems that there are mainly slowing forces at work. Since such tariffs and a trade war have not been seen in the global economy for some time, the direction and scale of the effects are largely open.”

 

Fiscal spending:

 

Exchange rate:

  • National Bank of Slovakia Peter Kažimír – 8 December: “We continue monitoring the exchange rate pass-through to goods inflation, as it may not be as strong as expected. Firms might not entirely reflect developments in the exchange rate markets in their final prices.”
  • Bank of Finland Governor Olli Rehn – 8 December: “The strengthening of the euro this year is still passing through”
  • ECB Chief Economist Philip Lane – 3 December: “Simulations based on the ECB’s semi-structural multi-country model indicate that a 10% appreciation in the euro plays out over several years, with inflation markedly lower for about three years and a peak disinflation impulse of 0.6 percentage points after about a year. The level of GDP declines throughout this adjustment period, with a cumulative loss of about one per cent of GDP after three years. In relation to trade dynamics, the euro appreciation reduces export volumes by about 3% over this horizon and import volumes by about 1.5%.”
  • ECB Executive Board member Isabel Schnabel – 12 November: “another risk to the downside was the exchange rate. The exchange rate has now stabilized at a slightly higher level, but it has stabilized and this trend of a euro appreciation has not continued.”
  • Austrian National Bank Governor Martin Kocher – 12 November: “the exchange rate has stabilized over the last few weeks, almost months. So again, there is no need to think about monetary policy reactions solely based on the exchange rate … I don’t really expect [the appreciation] to continue … If it does continue, gradual is better, since this leaves space for economic factors to react … Later, it might show up in the GDP growth outlook, at which point it might influence our considerations. But we’re far from that at the moment.”
  • ECB Vice President Luis de Guindos – 6 November: What matters is the pace of the exchange rate movements, rather than the level itself.

 

Fed:

  • Bank of Finland Governor Olli Rehn – 8 December: “So, a serious reduction of autonomy in the case of the Fed would logically lead to structurally higher inflation in the US, and this would lead to consequences in Europe that we would need to tackle based on our primary mandate of price stability, one element of which is the exchange rate.”
  • Austrian National Bank Governor Martin Kocher – 12 November: “We do not react automatically to the rate decisions of any other central banks, including the Fed. Theoretically speaking, at some stage, US rate cuts should have effects on the US economy or financial markets, and there might be spillovers to which we would need to react. But I don’t see any such scenario influencing our policy considerations at the moment. For the time being, US rates are far above our rates, so there is no need to think about that yet.”