By Marta Vilar – WASHINGTON (Econostream) – European Central Bank Governing Council member Joachim Nagel said on Wednesday that inflation seemed to be well anchored to the ECB’s 2% target, but added that this could change.

Nagel, who heads the Deutsche Bundesbank, told Bloomberg that the situation around the Middle East conflict was “very opaque”, which meant that the ECB had to retain full optionality about policy.

“I would say we are somewhere in between our baseline scenario and our adverse scenario,” he said. “Now we have find out where it’s going, if it goes back to the baseline scenario, I’m a very happy person.”

He said inflation seemed to be “well anchored, but this can change,” adding that it was “really too early to say that we are on safe ground” and describing the current situation as “very shaky.”

He said setting monetary policy was challenging given the day-to-day changes in the conflict, describing the situation as “very delicate” despite some positive developments over the past week.

“I would say there is not enough clarity what will happen in April,” he said. “Two weeks can bring a lot of new information and we will take that into account.”

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