MNI BRIEF: Not Certain Inflation Will Fall Below 2% - Weidmann

Balancing the conflicting objectives of crisis actions and incentive-based regulatory frameworks remains an immensely difficult task for the Eurosystem, outgoing Bundesbank president Jens Weidmann said in his farewell address Tuesday.

Weidmann hailed the ECB’s new monetary policy strategy as a remarkable accomplishment, but said it has yet to be put to the test, with post-pandemic inflation rates causing concern among many people. There is, he said, a high degree of certainty as to whether inflation rates will readily fall below the ECB’s 2% target or become entrenched.

He thanked ECB president Christine Lagarde for creating a solution-oriented, open and constructive atmosphere in which to hold discussion. He also thanked her predecessor, Mario Draghi. Draghi, Weidmann said, “did not have an easy time in office, and he didn’t make it easy for himself with the positions he took. Many conservations I have had testify to this.”