ECB’s Cipollone: Fed Political Pressures Matter for ECB Only Through Euro Area Inflation

28 January 2026

By David Barwick – FRANKFURT (Econostream) – European Central Bank Executive Board member Piero Cipollone on Wednesday said political attacks on the U.S. Federal Reserve are relevant for the ECB only insofar as they affect the euro area inflation outlook.

Responding to a question about Fed Chair Jerome Powell’s independence and European expressions of support for him, Cipollone said in an interview with Spanish daily El País, “We are the central bank of the euro area, not the United States. We look at the euro area economy and set our interest rates so that we can maintain price stability, aiming for 2% inflation over the medium term.”

He continued: “What happens elsewhere in the world matters insofar as it matters for inflation in the euro area. We have to understand the channels through which events in the United States might have an impact here.”

Turning to President Christine Lagarde’s earlier description of the ECB being in “a good place,” Cipollone confirmed this characterization and downplayed the likelihood of an imminent deviation.

“GDP has been resilient and we’re expecting figures that may even outperform the forecasts,” he said. “And inflation has been hovering around our target in recent months. We are undoubtedly in a good place.”

“The good news, as I see it, is that the last revision was essentially due to investment,” he continued. “This is not only a demand-side component, but also a supply-side component. It means investment in greater [productive] capacity, which supports faster growth without putting price stability at risk. It looks as if the baseline scenario [in the forecasts] is becoming increasingly credible. I don’t expect any major changes, unless something dramatic happens.”

Still, he agreed, uncertain could rise and undercut the recovery via a negative impact on investment.

“So this could have an impact, particularly on growth, and inflation would clearly be affected,” he said. “If this uncertainty drags on, it will have an impact on the real economy.”

Away from rates, Cipollone rejected framing the digital euro mainly as a defensive response to geopolitics, instead casting it as a response to Europe’s fragmented payments landscape and dependence on non-European providers for cross-border digital payments.

Cash no longer covers modern retail needs, he argued, because it cannot be used digitally, citing e-commerce as a key gap and noting it now represents more than a third of daily transactions by value.

Geopolitics nonetheless reinforces the case, he said, because rising tensions increase risks around the “weaponization” of financial tools and strengthen the argument for a European system based on European technology and infrastructure and “fully under our control.”

He said legal tender status would create a single, open standard that merchants accepting digital payments would have to take, while dismissing proposals to restrict the digital euro to offline use only: “How can an offline solution be used to pay in the e-commerce space? I don’t know.”