MNI BRIEF: ECB Sees “Easy Last Kilometre” In The Coming Quarters-Paper
The European Central Bank sees reason to be optimistic about inflation in the short term, predicting an “easy last kilometre” in the coming quarters based on a model presented in a paper titled ‘Drivers of Post-pandemic inflation’ that will be discussed in Sintra.
The paper notes how the model’s predictions -- based on pre-covid data and thus reflecting pre-covid monetary policy conduct and transmission -- and how the model concurs with the Survey of Professional Forecasters, indicating that ECB’s monetary policy has returned to “its pre-covid normalcy”.
The ECB's Sintra forum -- from Jul 1 through 3 -- will also see papers presented on ‘The economics of biodiversity loss’, European productivity and analysis of interest rate cycles from an historic perspective that sees that present tightening cycles tend to be shorter.