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ECB: Centeno Still Firmly Dovish, Repeats Undershooting Risks

ECB
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Banco de Portugal has published comments from Centeno, which flesh out his typically dovish view in more detail.  

  • “Today, there may still be a few "inflation mathematicians" hesitant to declare victory, but the statistics tell a different story: inflation has converged on solid economic fundamentals.”
  • “The current state of the euro area economy, along with the prevailing price and labor market conditions, necessitates a response from the ECB: a reduction in interest rates.”
  • Undershooting risks are again noted prominently: "The inflation convergence should not come as a surprise: it is the economy. The risk now is undershooting."
  • And later on in his comments: "However, now we face a new risk: undershooting target inflation, which could stifle economic growth. Fewer jobs and reduced investment would add to the sacrifice ratio already endured. A sluggish economy would reinforce, in a vicious cycle, inflation undershooting"
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Banco de Portugal has published comments from Centeno, which flesh out his typically dovish view in more detail.  

  • “Today, there may still be a few "inflation mathematicians" hesitant to declare victory, but the statistics tell a different story: inflation has converged on solid economic fundamentals.”
  • “The current state of the euro area economy, along with the prevailing price and labor market conditions, necessitates a response from the ECB: a reduction in interest rates.”
  • Undershooting risks are again noted prominently: "The inflation convergence should not come as a surprise: it is the economy. The risk now is undershooting."
  • And later on in his comments: "However, now we face a new risk: undershooting target inflation, which could stifle economic growth. Fewer jobs and reduced investment would add to the sacrifice ratio already endured. A sluggish economy would reinforce, in a vicious cycle, inflation undershooting"