MNI BRIEF: ECB Must Avoid Policy Being Too Tight - Panetta
The European Central Bank must prevent monetary policy from becoming excessively tight and then “pushing inflation below ECB’s symmetric target”, Bank of Italy Governor Fabio Panetta
The European Central Bank must prevent monetary policy from becoming excessively tight and then “pushing inflation below ECB’s symmetric target”, Bank of Italy Governor Fabio Panetta said in a speech on Friday.
He noted that if “the incoming data is consistent with the current projections, it will be appropriate to ease monetary conditions” and, referring directly to the path of rate cuts, stressed that “prompt and gradual action would contain macroeconomic volatility better than a tardy and hasty approach”. (see MNI SOURCES: Fed, Geopolitics, Feed ECB Caution Over Cuts)
Panetta said growth prospects for the euro area are modest and subject to downside risks due to geopolitical tensions and restrictive monetary and fiscal policies that “may dampen consumption and investment more than expected”.