ECB Comment Recap: Policymakers Emphasize Full Optionality, Some See Rate Hikes a Distant Prospect

29 January 2026

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:

Hikes:

Banque de France Governor François Villeroy de Galhau – 20 January: “Barring a major external shock … I think it’s [hikes in 2026 being “fanciful”] still the case.”
Bulgarian National Bank Governor Dimitar Radev – 19 January: “If the inflation outlook were to deteriorate materially, especially through more pronounced persistence in services inflation and wage dynamics, all options would need to remain on the table. Conversely, if disinflation continues to broaden and becomes firmly embedded in underlying measures, that would point in the opposite direction.”
Eesti Pank Governor Madis Müller – 12 January: Rate hikes are an issue for “a few years ahead,” not a policy move to be expected in the coming months or quarters.
Banque de France Governor François Villeroy de Galhau – 12 January: “Barring an unlikely shock, this [hiking interest rates in 2026] is a fanciful theory.”
National Bank of Belgium Governor Pierre Wunsch – 29 December: “Isabel Schnabel says the next step is an interest rate hike. That’s a possibility. We’ll see. Today’s interest rate policy is appropriate.”
ECB Executive Board member Isabel Schnabel – 22 December: “I think, at the moment, no rate hikes are to be expected in the foreseeable future” … the “changed macroeconomic and geopolitical situation in which there could be stronger fragmentation, also structurally, that in fact more inflationary forces are at work than disinflationary ones.”
Bank of Finland Governor Olli Rehn – 19 December: The next rate move will not necessarily be a hike, but the Governing Council will keep “its full freedom of action.”

Hold:

ECB Executive Board member Isabel Schnabel – 28 January: “ECB rates [are] in a good place and [are] expected to remain at current levels for [an] extended period.”
Bank of Lithuania Governor Gediminas Šimkus – 28 January: “[O]ur current monetary policy stance fits the current situation well.”
Austrian National Bank Governor Martin Kocher – 22 January: “Given the status quo, we expect a pretty stable development. Of course there might be lots of things that change.”
Bulgarian National Bank Governor Dimitar Radev – 19 January: “I continue to view the current level of interest rates as appropriate, insofar as it is consistent with a policy stance that can deliver a timely and sustained return of inflation to 2% over the medium term, based on the information currently available. A change in stance would require a clear and material shift in the inflation outlook.”
Latvijas Banka Governor Mārtiņš Kazāks – 19 January: “Uncertainty is high and risks are two-sided, so alternative scenarios could materialize, but the baseline seems reasonably robust from today’s perspective, barring a major shock. This all adds up to being in a good place, and it means that we don’t need to make any abrupt policy adjustments. We don’t have any unfinished business in terms of interest rates, either; if the baseline macro scenario holds, rates are appropriate as they are.”
ECB Chief Economist Philip Lane – 16 January: “Under these circumstances, no one expects very large movements in interest rates … the current level of the interest rate delivers the baseline for the next several years.”
Latvijas Banka Governor Mārtiņš Kazāks – 14 January: “We’ve been delivering on the mandate, and that allows us now to be … much more … kind of calm, but it by no means means that we are relaxed.”
Bulgarian National Bank Governor Dimitar Radev – 9 January: “[T]here is no reason to expect any sharp movements or significant changes in interest rates. We do not expect any surprises along this line.”
ECB Vice President Luis de Guindos – 8 January: Rates are appropriate … “obviously the situation can change, uncertainty is very high and unexpected developments are occurring. Given the high level of uncertainty, if circumstances change, our monetary policy will be adjusted.”
Banco de Portugal Governor Álvaro Santos Pereira – 7 January: “We currently expect inflation to remain close to that target. As long as this continues, there is no reason to change monetary policy.”
Bank of Greece Governor Yannis Stournaras – 28 December: “Unless the euro area economy is faced with a severe shock that would cause inflation to deviate significantly from our medium-term objective, the current monetary policy stance is appropriate.”
ECB Executive Board member Isabel Schnabel – 22 December: “[I]nterest rates will probably remain stable for quite some time if nothing unforeseen happens.”
National Bank of Belgium Governor Pierre Wunsch – 19 December: If the updated forecasts materialize, no change to the policy stance will be required for some time.
De Nederlandsche Bank Governor Olaf Sleijpen – 19 December: Risks to the outlook are “significant,” there is currently “no reason” to move rates precisely due to these risks.

Next move in either direction:

Bank of Lithuania Governor Gediminas Šimkus – 27 January: “I fully believe there is an equal chance that our next move, whenever it comes, is either an increase or a cut in rates.”
Austrian National Bank Governor Martin Kocher – 22 January: “[W]e are ready, with full optionality, to react to any changes in the external environment, in any direction, either going up or down.”
Bulgarian National Bank Governor Dimitar Radev – 19 January: “On the upside, that would involve evidence of entrenched inflation persistence, particularly in services inflation and wage dynamics, together with indications that domestic price pressures are not easing as projected. On the downside, it would require sustained and broad-based confirmation that underlying inflation is durably converging below the 2% target across components, reflecting easing domestic cost pressures and weaker-than-expected demand.”
Latvijas Banka Governor Mārtiņš Kazāks – 19 January: “With interest rates at 2%, we are well positioned to move in any direction if the situation warrants it, using our most effective instrument.”
ECB Chief Economist Philip Lane – 16 January: “But if we see developments in either direction, we will react.”
Banco de Portugal Governor Álvaro Santos Pereira – 19 December: “Regarding whether there will be a rise or fall [in interest rates], that will depend on the economic conditions, on whether there will be shocks.”
National Bank of Belgium Governor Pierre Wunsch – 19 December: I am “not making any bet, not even on the direction” of rates when they do change.
Banco de España Governor José Luis Escrivá – 19 December: “We are open to moving rates either way, but for now we are very comfortable at 2%.”
Austrian National Bank Governor Martin Kocher – 19 December: The next move could either be a cut or a hike, depending on which is necessary.
Eesti Pank Governor Madis Müller – 19 December: “If you ask me what will happen in six months or after that, it’s honestly too early to speculate … It is possible to imagine scenarios in both directions. If the euro area economy doesn’t do well and inflation slows further, then maybe there’s a reason to reduce rates further. But it’s also possible to imagine the opposite.”

Full optionality:

Austrian National Bank Governor Martin Kocher – 28 January: “It makes absolute sense at the moment to keep full optionality of monetary policy decisions: the situation is uncertain.”
Austrian National Bank Governor Martin Kocher – 27 January: While the ECB is “in a good place,” uncertainty is “still very high”. Policymakers need “full optionality” in both directions.
Austrian National Bank Governor Martin Kocher – 22 January: “At the moment, the international environment is so uncertain that we think it’s optimal to have this full optionality and to decide at the meeting whether we stick with our monetary stance, we stick with our interest rates, or whether we want to change them, adjust them upwards or downwards.”
Bank of Greece Governor Yannis Stournaras – 23 December: “We have to preserve optionality and stand ready to move our policy rates in either direction, maintaining a data-dependent, meeting-by-meeting approach … If we happen to be in a better or weaker position than expected, we will take appropriate action.”
ECB Executive Board member Isabel Schnabel – 22 December: “But it was also the case that we kept all options open, so that we are in a position to respond to new data.”
National Bank of Slovakia Governor Peter Kažimír – 22 December: “[W]e remain fully flexible and ready to act as soon as the situation requires it.”
Latvijas Banka Governor Mārtiņš Kazāks – 19 December: “I think it’s still very appropriate to use the modus operandi that we have been using already for some time, which is data-dependent, meeting-by-meeting, with full optionality.”
Banco de España Governor José Luis Escrivá – 19 December: “We speak of full optionality, which depends on factors that are difficult to anticipate and could point to a move in either direction.”
Banque de France Governor François Villeroy de Galhau – 19 December: The ECB must keep “a great deal of humility and maximum optionality” given uncertainty.
ECB President Christine Lagarde – 18 December: “There was a unanimous decision that was taken today concerning the rates that we decided to hold, but there was also a unanimous view that all optionalities should remain on the table…”

Good place:

ECB Executive Board member Isabel Schnabel – 28 January: “ECB rates [are] in a good place and [are] expected to remain at current levels for [an] extended period.”
ECB Executive Board member Piero Cipollone – 28 January: “GDP has been resilient and we’re expecting figures that may even outperform the forecasts. And inflation has been hovering around our target in recent months. We are undoubtedly in a good place.”
Banque de France Governor François Villeroy de Galhau – 20 January: “On monetary policy, which is again our core business, we are in a good place, as Christine Lagarde stressed, but I stress once more that we should be agile and pragmatic. So, look at data.”
Latvijas Banka Governor Mārtiņš Kazāks – 19 January: “This all adds up to being in a good place, and it means that we don’t need to make any abrupt policy adjustments … ‘Good place’ is just a conditional assessment of where we stand today, given available information … So, I do not think saying we are in a good place undermines optionality.”
Latvijas Banka Governor Mārtiņš Kazāks – 14 January: “I think currently we are still in a good place, and that is a result of the decisions that the Governing Council took in the past few years.”
ECB Vice President Luis de Guindos – 14 January: Inflation remains at a “good place,” it has moved around “a narrow range since the spring,” while standing at 2.0% in December 2025.
Banco de Portugal Governor Álvaro Santos Pereira – 7 January: Inflation is at target and monetary policy is in a “good place.”
Bank of Greece Governor Yannis Stournaras – 23 December: ECB is in a “good place” at the moment, given that “inflation remains on track to reach our 2% target in the medium term, although the projections show a slight undershooting in 2026 and 2027 … being in a good place does not imply that policy rates are locked in.”
ECB Executive Board member Isabel Schnabel – 22 December: “[W]e repeated this sentence again, which has shaped the last meetings: we are in a good place. And by that we mean that, on the one hand, current inflation is close to our target – so at 2.1% in the euro area – and at the same time, our inflation forecast over the next years in the area of 2%, and therefore we are quite satisfied with the current inflation situation.”
National Bank of Belgium Governor Pierre Wunsch – 19 December: The ECB’s monetary policy is “in a good place.”
Banco de España Governor José Luis Escrivá – 19 December: “We are in a good position to maintain a consistent monetary policy.”
De Nederlandsche Bank Governor Olaf Sleijpen – 19 December: The ECB is still in a “good place,” given that inflation is “very close to 2%,” which is “a kind of Nirvana for central bankers.”
ECB President Christine Lagarde – 18 December: “On interest rate, we reconfirmed that we are in a good place, which does not mean that we are static.”

Market expectations:

Latvijas Banka Governor Mārtiņš Kazāks – 19 January: “Broadly speaking, given the uncertainty we face, expectations look reasonably aligned. If markets were significantly mispricing the macro outlook, that would worry me and I would ask why, what is the reason.”

Economic growth:

ECB Executive Board member Isabel Schnabel – 28 January: “Euro area economy proves resilient despite tariffs, driven by services sector … Domestic demand in the euro area has recovered, supported by [the] resilient labor market.”
Bank of Lithuania Governor Gediminas Šimkus – 28 January: “[T]he economy last year managed to perform significantly better than expected.”
Austrian National Bank Governor Martin Kocher – 28 January: The recovery has been more resilient than expected and I am “cautiously optimistic” about growth this year.
ECB Executive Board member Piero Cipollone – 28 January: “GDP has been resilient and we’re expecting figures that may even outperform the forecasts … The good news, as I see it, is that the last revision was essentially due to investment. 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 is becoming increasingly credible. I don’t expect any major changes, unless something dramatic happens.”
Bank of Lithuania Governor Gediminas Šimkus – 27 January: The economy has adapted relatively well to recent volatility, but fresh shocks could quickly unsettle the ECB’s “good place” of inflation at target, growth around potential, and rates at neutral.
Banca d’Italia Governor Fabio Panetta – 21 January: The global economy has performed better than expected last year. There have been no recessions or slowdowns.
ECB President Christine Lagarde – 20 January: “[W]hat is I think more important than the tariffs themselves is the rising uncertainty that we are seeing again. So, uncertainty is back” … The possibility that growth, which is doing “reasonably well,” would “stall” as a result of the uncertainty is “really inconvenient.”
Banque de France Governor François Villeroy de Galhau – 20 January: “Growth has been resilient in the euro area.”
ECB Chief Economist Philip Lane – 16 January: “This year I think an important transition is under way. We have seen a sustained decline in energy prices over the past year or so. And starting this year especially we see greater fiscal support in Germany, which will help growth. And we have brought interest rates down from 4% in June 2024 to 2% in June 2025. Monetary policy operates with lags, so we think this will feed into a stronger construction sector, for example, this year and next. So, I think we're going to see a stronger cyclical recovery in the European economy in 2026 and 2027. Nevertheless, a structural issue is that Europe’s potential growth rate is not high.”
Banca d’Italia Governor Fabio Panetta – 15 January: “Medium-term forecasts – including those of the government and leading analysts – point to modest growth [in Italy] in the coming years and bring the structural weaknesses of the Italian economy to the fore.” Italy’s growth momentum has recently weakened due to declining exports amid geopolitical and trade frictions, as well as subdued domestic demand.
Banque de France Governor François Villeroy de Galhau – 14 January: Economic growth [in France] keeps showing significant resilience.
Bank of Finland Governor Olli Rehn – 14 January: “[T]he EU economy has demonstrated a significant degree of resilience last year and this means that our inflation target is served well in the current context … Growth has kept up rather well close to the potential of Europe, even though we would want to see the European economy more dynamic. We need stronger productivity growth and stronger industrial competitiveness in Europe.”
National Bank of Belgium Governor Pierre Wunsch – 29 December: European economic developments have been better than feared.
Bank of Greece Governor Yannis Stournaras – 23 December: “[T]he key takeaway from the projections is that the euro area economy shows resilience … there are reasons to be confident that the economic prospects will further strengthen. The euro area economy has shown remarkable resilience and is expected to grow steadily in the years ahead.”
ECB Executive Board member Isabel Schnabel – 22 December: The economy has “proven more resilient than many had thought.”
Bank of Lithuania Governor Gediminas Šimkus – 22 December: Economic growth has recovered but is still weak.
National Bank of Slovakia Governor Peter Kažimír – 22 December: The euro area economy is “holding up surprisingly well” and this resilience is “encouraging.”
Banco de Portugal Governor Álvaro Santos Pereira – 19 December: European economy showing surprising growth, but “still not enough”.
Bank of Finland Governor Olli Rehn – 19 December: “The inflation forecast was revised slightly upwards, as service and wage inflation has been slightly faster than forecast in recent months and economic growth is slightly stronger than previously expected … Growth is not very fast, despite the pick-up…”
Eesti Pank Governor Madis Müller – 19 December: There is “reason to be a little more optimistic about the economic outlook than a few months ago.”
ECB President Christine Lagarde – 18 December: “We think that there is some change taking place in our economies, and if you look in particular at the drivers and what has surprised us on the upside, it's characteristically investment, and it's not just spending by the public sector, which there is. But it's also the private sector, the corporate sector, both large corporates but also SMEs as well. And their investment, based on the data that we collect, based on the surveys that we conduct, is largely attributable to the development of AI. And AI takes multi-facets, but certainly computer capacity, telecommunication, additional investment in intangible –more than tangible – CapEx is really characteristic of what we are seeing at the moment.”

Growth risks:

Austrian National Bank Governor Martin Kocher – 28 January: The main downside risks are further trade tensions, geopolitical developments, and the possibility of an equity-market reversal.
ECB Executive Board member Piero Cipollone – 28 January: “Yes, uncertainty may rise and this could affect the robustness of the recovery, since it would pose a risk to investment. As a result, the positive aspect I mentioned earlier would be undermined. So, this could have an impact, particularly on growth, and inflation would clearly be affected. If this uncertainty drags on, it will have an impact on the real economy.”
Austrian National Bank Governor Martin Kocher – 27 January: Downside risks are “quite substantial” … German stimulus and Europe’s “very high” savings rate are potential sources of support for growth.
Deutsche Bundesbank President Joachim Nagel – 24 January: “Economic growth could be weaker; inflation could be higher.”
Deutsche Bundesbank President Joachim Nagel – 21 January: A worsening of the disagreement between the US and Europe about Greenland would risk posing a setback to the recovery of the German economy.
Deutsche Bundesbank President Joachim Nagel – 21 January: Escalation on tariffs would have a “negative impact [on the European economy] for sure.”
Bulgarian National Bank Governor Dimitar Radev – 19 January: “Risks to growth remain tilted to the downside. External demand is weak, and the effects of past monetary policy decisions are still in part feeding through the economy, weighing on financing conditions and demand. At the same time, lower inflation is supporting real incomes, labor markets remain relatively resilient, and fiscal policy is providing some support in parts of the euro area. The key question is whether the recovery becomes more broad-based while remaining consistent with the return of inflation to target.”
Latvijas Banka Governor Mārtiņš Kazāks – 15 January: “Risks are on both sides and there’s no room for complacency.”
ECB Vice President Luis de Guindos – 14 January: “[G]eopolitical risk noticeably increases downside risks to growth.”
Bank of Greece Governor Yannis Stournaras – 23 December: The balance of risks to the economy is “two-sided”.
National Bank of Belgium Governor Pierre Wunsch – 19 December: Growth and inflation risks are “broadly balanced.”
Latvijas Banka Governor Mārtiņš Kazāks – 19 December: “Risks are on both sides.”
De Nederlandsche Bank Governor Olaf Sleijpen – 19 December: Risks to growth and inflation “balanced,” but “big.”

Inflation risks:

ECB Executive Board member Piero Cipollone – 28 January: “Yes, uncertainty may rise and this could affect the robustness of the recovery, since it would pose a risk to investment. As a result, the positive aspect I mentioned earlier would be undermined. So, this could have an impact, particularly on growth, and inflation would clearly be affected. If this uncertainty drags on, it will have an impact on the real economy.”
Deutsche Bundesbank President Joachim Nagel – 24 January: “Economic growth could be weaker; inflation could be higher.”
Deutsche Bundesbank President Joachim Nagel – 21 January: “[T]he whole picture [of the potential impact of new tariffs on inflation] is pretty opaque” … Effects from tariffs are clearer with respect to growth than inflation, I am “more concerned” about the impact on economic activity.
ECB President Christine Lagarde – 21 January: “We have an inflation that would be very slightly affected [by US tariffs], probably to the upside, but as we have inflation under control at 1.9%, the impact would be minimal.”
Banque de France Governor François Villeroy de Galhau – 20 January: “There are downside risks on inflation, which remain at least as significant as the upside risks. There are upside risks also, but to mention some downside risks... I mentioned the possible appreciation of the euro, linked also to some attacks on the Fed independence, which are weakening the dollar.”
Bulgarian National Bank Governor Dimitar Radev – 19 January: “Compared with earlier phases of the disinflation process, risks now appear more balanced, although uncertainty remains elevated. Upside risks are primarily domestic in nature, especially the persistence of services inflation, wage developments, and the interaction between wages and profit margins. Downside risks are mainly related to weaker-than-expected economic activity and tighter financing conditions. At this stage, developments in services inflation remain central to the overall assessment.”
Latvijas Banka Governor Mārtiņš Kazāks – 19 January: “Uncertainty is high and risks are two-sided, so alternative scenarios could materialize, but the baseline seems reasonably robust from today’s perspective, barring a major shock.”
ECB Chief Economist Philip Lane – 16 January: “In one direction, a lot of the developments that could push inflation below the target on a medium-term basis would involve a slowdown in the economy. In the other direction, developments that push inflation above our medium-term target would typically involve an acceleration in the economy. But let me emphasize that in our baseline the economy is growing in the neighborhood of potential growth. So, to be above the baseline we would have to see a significant acceleration in the economy.”
Latvijas Banka Governor Mārtiņš Kazāks – 15 January: “Risks are on both sides and there’s no room for complacency.”
Banque de France Governor François Villeroy de Galhau – 14 January: “[T]he downside risks to inflation are at least as high as the upside risks: the possible depreciation of the dollar if the Fed’s independence is threatened is one of these downside risks.”
Latvijas Banka Governor Mārtiņš Kazāks – 14 January: Risks are two-sided, the situation is “relatively balanced”. Upside risks include higher government spending in Germany and geopolitics, while among downside risks are elevated equity valuations – especially among AI-related firms – and the possibility that cheaper Chinese goods could be redirected toward Europe.
ECB Executive Board member Isabel Schnabel – 22 December: Inflation currently subject to both upside and downside risks … “I am among those who tend to emphasize the upside risks; that is, I believe the upside risks dominate.”
National Bank of Slovakia Governor Peter Kažimír – 22 December: Risks to both growth and inflation are abating and have grown more balanced than recently.
Bank of Greece Governor Yannis Stournaras – 22 December: There are “forces acting in opposite directions” with respect to inflation.
National Bank of Belgium Governor Pierre Wunsch – 19 December: Growth and inflation risks are “broadly balanced.”
Latvijas Banka Governor Mārtiņš Kazāks – 19 December: “Risks are on both sides.”
De Nederlandsche Bank Governor Olaf Sleijpen – 19 December: Risks to growth and inflation “balanced,” but “big.”
Bank of Finland Governor Olli Rehn – 19 December: “On the other hand, there are still downside inflation risks. Growth is not very fast, despite the pick-up, tariff increases may have a dampening effect on euro area inflation and wage growth may slow even faster than currently forecast.”
Banque de France Governor François Villeroy de Galhau – 19 December: Inflation risks “two-sided” but “particularly to the downside.”

Inflation:

Bank of Lithuania Governor Gediminas Šimkus – 28 January: “I would also say that we’ve done a great job on inflation, with headline and core measures fluctuating around our medium-term target. All this makes our near-term decisions rather clear.”
Deutsche Bundesbank President Joachim Nagel – 24 January: Inflation is “back towards 2%,” this is “very good news for all.”
Bank of Finland Governor Olli Rehn – 14 January: “In other words, inflation in the euro area is at around our 2% symmetric target.”
ECB Vice President Luis de Guindos – 14 January: Inflation remains at a “good place,” it has moved around “a narrow range since the spring,” while standing at 2.0% in December 2025.
Bank of Lithuania Governor Gediminas Šimkus – 22 December: Inflation is “now and in the near future, and mid-term, close to the 2% level.”
Deutsche Bundesbank President Joachim Nagel – 19 December: The disinflation process in Germany has been somewhat slower than anticipated.
Bank of Finland Governor Olli Rehn – 19 December: “[I]nflation may also be faster than forecast in the coming months.”

Inflation deviations:

Austrian National Bank Governor Martin Kocher – 27 January: Modest deviations from target would be acceptable, but clearer movement “in any direction” would warrant close monitoring and a policy response if data accumulate in that direction.
Banque de France Governor François Villeroy de Galhau - 20 January: “If there were to be a more significant and a more lasting deviation, then we would adapt, but we are not there at present.”
Latvijas Banka Governor Mārtiņš Kazāks – 19 January: According to our baseline scenario, “we will remain around the target with relatively minor deviations.”
ECB Chief Economist Philip Lane – 16 January: “Our December projections have non-energy inflation at around 2% through 2026, 2027 and 2028 and only minor deviations of headline inflation from 2%.”
ECB Chief Economist Philip Lane – 9 January: “[I]t is unhelpful to seek out all-purpose monetary policy rules that set interest rates on the basis of a fixed relation to a small number of variables. Rather, optimal monetary policy requires a nuanced, full-scale assessment of the underlying drivers of inflation and activity.”
Bank of Greece Governor Yannis Stournaras – 23 December: Projections showed inflation ahead was to be “broadly in line with this objective, with no material likelihood of persistent overshooting or undershooting, until the end of the projection horizon.”
Latvijas Banka Governor Mārtiņš Kazāks – 19 December: “The deviations that we have in the forecast are relatively small. Inflation expectations remain anchored, and I don’t see risks to that at the moment.”

Trade tensions:

Deutsche Bundesbank President Joachim Nagel – 21 January: The current situation is “very delicate” because “all these uncertainties regarding the tariff discussion will have some spillovers to monetary policy” … the new tariff situation could be a “game changer” … Escalation on tariffs would have “negative impact [on the European economy] for sure.”
Banca d’Italia Governor Fabio Panetta – 21 January: “I have many uncertainties about the impact of tariffs; how international trade will then be influenced by these imposed tariffs. There may be delays.”
ECB President Christine Lagarde – 20 January: “what is I think more important than the tariffs themselves is the rising uncertainty that we are seeing again. So, uncertainty is back” … The possibility that growth, which is doing “reasonably well,” would “stall” as a result of the uncertainty is “really inconvenient.”
Banque de France Governor François Villeroy de Galhau - 20 January: “On activity, tariffs are obviously bad news for everybody … And the problem is that again this crisis raises again trade uncertainty. So, it's bad news for everybody again, including the US … there could be a limited direct inflationary effect, but there could be also an appreciation of the euro, which plays in the opposite direction … probably, the impact on European inflation… I expect it to be muted.”
ECB Chief Economist Philip Lane – 16 January: “That said, by and large, I would say that the main risk factors for the euro area are external: risks to the growth of the world economy as well as the evolution of geopolitical tensions, and the way these interact with global trade policies.”
Banca d’Italia Governor Fabio Panetta – 15 January: Italy’s growth momentum has recently weakened due to declining exports amid geopolitical and trade frictions, as well as subdued domestic demand.
ECB Vice President Luis de Guindos – 14 January: “[D]isrupted trade patterns can further complicate inflation dynamics” … “geopolitical risk noticeably increases downside risks to growth” … Inflation could move lower if higher US tariffs dampen demand for euro area exports or excess-capacity countries boost shipments to the bloc, or higher of global supply chains become further fragmented.

Rerouting of Chinese goods:

Deutsche Bundesbank President Joachim Nagel – 24 January: More must be done in the German automotive sector “before one of our core industries falls victim to aggressive industrial policy.”
Banca d’Italia Governor Fabio Panetta – 21 January: “Export prices of Chinese goods have fallen in recent months. This is a strategy of market penetration, and Chinese exports to Europe are increasing, including to Italy.”
Banque de France Governor François Villeroy de Galhau – 20 January: “[We are seeing] increasing imports from China with significant figures. If you take the last six months, we know there was increase in volume of 11% of Chinese imports with lower prices. So, it's a factor which contributes to low inflation. This is why I mentioned it is a downside risk on inflation.”
Bulgarian National Bank Governor Dimitar Radev – 19 January: “There are channels through which this could occur, but the assessment needs to be firmly grounded in the data, including developments in imports, goods prices, and indicators of price competition. Were such effects to materialize, they may be disinflationary for goods prices in the short term … This is a risk that merits close monitoring. Import-driven disinflation can be meaningful for certain goods categories, but it does not automatically translate into broad-based disinflation. For the medium-term outlook, domestic inflation dynamics—particularly services inflation—and wages remain decisive. If import price effects prove stronger or more persistent than assumed, they will be incorporated into the overall assessment, but they cannot substitute for evidence on underlying domestic price pressures.”
Latvijas Banka Governor Mārtiņš Kazāks – 19 January: “China is also a downside risk, not only through its exports to Europe, but through intensified competition from Chinese firms in third markets where European companies sell.”
ECB Chief Economist Philip Lane – 16 January: “In Europe we have clearly seen lower import prices from China. This means European firms competing around the world also have to modify their prices if they want to maintain market share. On top of that the euro has appreciated. What the world wants to see is that the expansion of China’s productive capacity is accompanied by a strengthening of domestic demand. A more balanced global economy requires the expansion of supply in China to go hand in hand with greater export opportunities to the Chinese market, including for services.”
Latvijas Banka Governor Mārtiņš Kazāks – 14 January: Risks are two-sided, the situation is “relatively balanced”. Upside risks include higher government spending in Germany and geopolitics, while among downside risks are elevated equity valuations – especially among AI-related firms – and the possibility that cheaper Chinese goods could be redirected toward Europe.
Bank of Finland Governor Olli Rehn – 14 January: “We have seen that the trade war of the US is indirectly impacting Europe because from China, we are seeing increasing flooding of low prices goods in Europe. There has been a clear increase of Chinese exports in the European markets. That’s why we are concerned about trade policies.”
ECB Vice President Luis de Guindos – 14 January: The economy remains vulnerable to external shocks stemming from geopolitical and trade tensions. China is “increasingly competitive in key export sectors of euro area countries, with its share of global exports rising steadily, particularly in advanced manufacturing and green technology sectors” … Inflation could move lower if higher US tariffs dampen demand for euro area exports or excess-capacity countries boost shipments to the bloc, or higher of global supply chains become further fragmented.
Banque de France Governor François Villeroy de Galhau – 12 January: Wage moderation, low-cost Chinese imports and the possibility of a weaker dollar if the Fed independence were challenged all argued against higher rates.
Bank of Greece Governor Yannis Stournaras – 22 December: The rerouting of Chinese exports to Europe is a downward force for inflation.
Latvijas Banka Governor Mārtiņš Kazāks – 19 December: Competitive pressure from China is likely to intensify, potentially exerting downward pressure on prices.
Banque de France Governor François Villeroy de Galhau – 19 December: “Over the past six months, Chinese imports into Europe have increased by 11% in volume terms and their prices have fallen by 9%. This is weighing down on both inflation and activity.”

Fragmentation of supply chains:

ECB Chief Economist Philip Lane – 16 January: “For us, this probably means greater volatility. We need to understand whether a shock is transitory or medium-term. These factors affect both demand and supply: if a firm loses an export market, it cuts investment (a negative demand effect); if it loses a key supplier, its productive capacity declines (a supply effect). If these factors were assessed to move inflation in a persistent way in either direction, monetary policy would be affected.”
ECB Vice President Luis de Guindos – 14 January: Inflation could move lower if higher US tariffs dampen demand for euro area exports or excess-capacity countries boost shipments to the bloc, or higher of global supply chains become further fragmented.

Core inflation:

Latvijas Banka Governor Mārtiņš Kazāks – 15 January: Core inflation is now standing closer to the 2% target.
ECB Vice President Luis de Guindos – 14 January: Energy prices have fallen compared with a year earlier and core inflation has eased mildly.

Wages and services inflation:

Banque de France Governor François Villeroy de Galhau – 20 January: “If you look also one year ago, the euro has strengthened … It's a sign of confidence in the euro. So, also the question of Chinese import, wage moderation. So, there are many factors which could really dampen inflation, but we will see.”
Bulgarian National Bank Governor Dimitar Radev – 19 January: “The assessment [about price pressures stemming from wages and services being “evident”] has become more nuanced. There has been further progress in headline inflation converging to target and some easing in certain underlying price measures. At the same time, services inflation has remained relatively persistent, and wage growth continues to be a key determinant of the medium-term outlook.”
ECB Chief Economist Philip Lane – 16 January: “Over the course of this year we expect to see a transition towards a more sustainable 2% inflation rate, where both services inflation and wage inflation come down. This puts the stabilization of inflation at our 2 per cent target on a more secure basis.”
ECB Vice President Luis de Guindos – 14 January: Wage growth is exerting upward pressure on core inflation, but more forward-looking indicators are suggesting wage growth will slow down in the coming quarters, stabilizing in late 2026.
Banque de France Governor François Villeroy de Galhau – 12 January: Wage moderation, low-cost Chinese imports and the possibility of a weaker dollar if the Fed independence were challenged all argued against higher rates.
ECB Executive Board member Isabel Schnabel – 22 December: “[W]age growth was noticeably stronger than we had thought. It is still coming down, but more slowly than we had thought. And services inflation was stronger than we had thought, and all of that then led to broad agreement in the Governing Council that one can leave interest rates unchanged.”
Latvijas Banka Governor Mārtiņš Kazāks – 19 December: Wage growth is a key reason inflation had proven more stubborn than previously anticipated.
Bank of Finland Governor Olli Rehn – 19 December: “[W]age growth may slow even faster than currently forecast.”
ECB President Christine Lagarde – 18 December: “[W]e will be looking at all sorts of data in the field of wages, salaries, the decomposition of it; we will be particularly attentive because it plays a significant role in relation to services – and we do not have a set path for our rates going forward … we anticipate two things in relation to that. Number one, that wages will follow a slightly declining trend, going forward, and we have wages slightly below 3% at the end of 2026, and that is based on measurement instruments that we have: whether it's the wage tracker, which incorporates all the collective bargaining agreements that are negotiated, and which roll out in either one or two or three years, depending on the countries, and under which we cover now eight countries with quite a large number of employees, workers, or whether it is the surveys and the corporate telephone survey that we conduct asking corporates, you know, where do you see salaries, where do you see wages, how are the negotiations going? So, on the basis of all that, we believe that this compensation per employee should decline in the course of 2026.”

Exchange rate:

Bank of Lithuania Governor Gediminas Šimkus – 28 January: “[T]he exchange rate might turn out to be one reason to take a certain decision, but based on what we know now, I cannot conclude that we are already able to say that a future monetary policy move will need to be in any particular direction … to say that we need to adjust monetary policy because the euro is at USD 1.19 is an oversimplification.”
Banque de France Governor François Villeroy de Galhau – 28 January: “[W]e are closely monitoring this appreciation of the euro and its possible implications for lower inflation. This is one of the factors that will guide our monetary policy stance and interest rate decisions in the months ahead.”
Austrian National Bank Governor Martin Kocher – 28 January: “If the euro appreciates further and further, at some stage this might create of course a certain necessity to react in terms of monetary policy.”
Austrian National Bank Governor Martin Kocher – 27 January: The ECB needs to watch whether the euro appreciation continues, possibly at a faster rate, in the coming weeks and months, but “we don’t see that at the moment.”
Austrian National Bank Governor Martin Kocher – 22 January: “[S]ince we are above already purchasing power parity, my expectation is at the moment that we don’t see a strong development in the same direction also in 2026.”
Banque de France Governor François Villeroy de Galhau – 20 January: “I mentioned the possible appreciation of the euro [as a downside risk], linked also to some attacks on the Fed independence, which are weakening the dollar … If you look also one year ago, the euro has strengthened … It's a sign of confidence in the euro. So, also the question of Chinese import, wage moderation. So, there are many factors which could really dampen inflation, but we will see.”
ECB Chief Economist Philip Lane – 16 January: “This appreciation is a disinflationary effect for the euro area.”
Banque de France Governor François Villeroy de Galhau – 12 January: Wage moderation, low-cost Chinese imports and the possibility of a weaker dollar if the Fed independence were challenged all argued against higher rates.
Banque de France Governor François Villeroy de Galhau – 19 December: “The ECB does not have an exchange rate target, but we will remain vigilant and pragmatic if we have to adjust our monetary policy to a stronger euro and imported disinflation. That said, at its current level of USD 1.17, the euro is almost exactly in line with its 25-year average.”

High fiscal spending:

Bulgarian National Bank Governor Dimitar Radev – 19 January: “If it is well-targeted at the domestic economy and sustained, it should support euro area growth, including through meaningful spillover effects to other countries. The implications for inflation depend largely on the design and implementation of the measures. Demand-heavy measures in sectors facing capacity constraints could add to inflationary pressures, while investment that raises potential output would be less inflationary over time. In any case, much of the impact is likely to materialize with a lag.”
Latvijas Banka Governor Mārtiņš Kazāks – 19 January: “Fiscal policy is another hard-to-assess factor. Germany’s stimulus is structurally necessary, but the key question is how much translates into higher productivity versus how much mainly boosts consumption and, in turn, price pressures.”
ECB Chief Economist Philip Lane – 16 January: “And starting this year especially we see greater fiscal support in Germany, which will help growth.”
Latvijas Banka Governor Mārtiņš Kazāks – 14 January: Risks are two-sided, the situation is “relatively balanced”. Upside risks include higher government spending in Germany and geopolitics, while among downside risks are elevated equity valuations – especially among AI-related firms – and the possibility that cheaper Chinese goods could be redirected toward Europe.
ECB Vice President Luis de Guindos – 14 January: “Business investment and substantial government spending on infrastructure and defense should increasingly underpin the economy.”
National Bank of Belgium Governor Pierre Wunsch – 29 December: More expansive German fiscal policy could provide a small boost in 2026 and especially in 2027, but from a structurally weak starting point.
Bank of Greece Governor Yannis Stournaras – 28 December: “[A] stronger-than-expected boost in defense and infrastructure spending could boost both growth and inflation.”
Bank of Greece Governor Yannis Stournaras – 23 December: “[S]ubstantial government spending on defense and infrastructure is expected to provide an important boost to economic activity.”
Bank of Greece Governor Yannis Stournaras – 22 December: Climate and defense spending are sources of upward price pressures.

Fed loss of independence:

ECB Executive Board member Piero Cipollone – 28 January: “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 US might have an impact here.”
Bulgarian National Bank Governor Dimitar Radev – 19 January: “A perceived weakening of independence could raise inflation risk premia and increase global financial volatility. Spillovers to the euro area could occur through financial conditions, exchange rates, and global demand … Exchange rate movements can provide some buffering effect [to this imported inflation], but they should not be overstated. A stronger euro would, all else equal, dampen imported inflation, but the net impact would depend on the broader macro-financial environment, including changes in risk premia, global demand, and financial conditions.”
ECB Chief Economist Philip Lane – 16 January: “It would be economically difficult for us if inflation in the US did not return to target, or if financial conditions in the United States spilled over to a rising term premium. A reassessment of the future role of the dollar could also constitute a kind of financial shock to the euro. So, there are scenarios where, if the Federal Reserve departed from its mandate, that would create a problem.”
Latvijas Banka Governor Mārtiņš Kazāks – 15 January: A less independent Fed is likely to trigger higher consumer inflation in the US and that would lead in turn to higher interest rates.
Banque de France Governor François Villeroy de Galhau – 14 January: “[T]he downside risks to inflation are at least as high as the upside risks: the possible depreciation of the dollar if the Fed’s independence is threatened is one of these downside risks.”
Latvijas Banka Governor Mārtiņš Kazāks – 14 January: Pressures on Federal Reserve Chair Jerome Powell are “of course a worry.” The impact of the pressure could include a “stronger inflationary bias,” leading to the risk that “inflationary expectations start to de-anchor, and that means that inflation’s likely to be higher.”
Bank of Finland Governor Olli Rehn – 14 January: “It is certainly dangerous if the independence of the Federal Reserve were to be undermined. That could mean we could see a structural rise of inflation and because of the systemic importance of the US in the world economy … Europe would have to take that into account in our decisions to safeguard price stability and economic stability more broadly.”
Banque de France Governor François Villeroy de Galhau – 12 January: Wage moderation, low-cost Chinese imports and the possibility of a weaker dollar if the Fed independence were challenged all argued against higher rates.