In our view, the ECB will not quickly change the new more balanced assessment of inflation. However, the risk remains that as much as the ECB frequently overestimated inflation dynamics during the last decade, it could now structurally underestimate inflation. ‘Temporary’ or ‘transitory’ has just become a bit longer. Even though the ECB admitted that its previous forecast on when inflation would come down again, had been too optimistic, the overall view that the current inflation spur is temporary remains in place. It took a while but the ECB finally shifted its official communication on inflation from the broad denial of the summer months towards a much more balanced assessment and a good in-depth analysis of the factors currently driving inflation.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |