MNI BRIEF: No Tweaks Needed To ECB Inflation Target - Rehn
MNI (LONDON) - The European Central Bank's upcoming review of its 2021 policy framework changes should not focus on tweaks to the current inflation target as the “symmetric 2% over the medium term” goal has provided a clear and comprehensible anchor and enough flexibility for the Governing Council to act in recent years, Bank of Finland Governor Olli Rehn said in a speech on Friday.
The current target allowed policymakers to "avoid taking any excessively drastic measures that the old target (close to but below 2%) might have implied," Rehn said.
"Thus, the target itself does not need re-consideration. But in the strategy assessment we need a better understanding of the inflation dynamics of the past few years and of the secular trends affecting monetary policy going forward. These include geopolitics and other drivers of the natural rate of interest.”