ECB Officials Weigh Two-Sided Inflation Risks Amid Economic Uncertainty
Top European Central Bank officials are grappling with divergent inflation pressures as geopolitical tensions and trade wars cloud the economic outlook. Governing Council member Olli Rehn emphasized maintaining policy flexibility during the IMF annual meetings, stating "we have risks that are two sided."
Consumer prices face opposing forces: potential upside from accelerating growth against downward pressure from cheaper energy, euro strength, and moderating wage increases. The ECB has held rates steady since June after eight consecutive quarter-point cuts, with inflation hovering NEAR its 2% target across the eurozone.
While most policymakers believe the easing cycle has concluded, some warn growth could underwhelm expectations. The central bank's next MOVE remains data-dependent as it navigates what Rehn called "pervasive uncertainty" in global markets.
