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ECB’s Weidmann says inflation might stay above 2% for some time -Breaking

by Mike Robinson

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© Reuters. FILEPHOTO: Jens Weidmann (Germany’s Bundesbank President) speaks to an economics conference that took place in Linz, Austria on July 5, 2018. REUTERS/Lisi Niesner/File Photo

FRANKFURT, (Reuters) – Inflation within the euro area might surprise the European Central Bank and keep above 2% for some while, so the ECB should not commit to staying ultra-easy for too much time, Jens Weidmann, outgoing president of the Bundesbank, stated on Friday.

Weidmann took a completely different tone shortly after Christine Lagarde (ECB President) called for support of the euro area’s economy.

Weidmann stated that higher inflation expectations and greater wage growth could increase price pressures over the medium-term. It is possible that inflation rates won’t fall below our target in the medium-term, as was previously predicted.

After a decade-long struggle to oppose the ECB’s easy money policy, Weidmann will be retiring at the close of the year.

He stated that “with the high uncertainty regarding the inflation outlook, the monetary policies should not be committed to their current expansionary stance too long.”

We need to remind everyone that if price stability is to be maintained, the whole of monetary policy must be normalized.

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