Archive

Waller - The Time Has Come

In his speech, Governor Christopher J. Waller highlighted the current state of the U.S. economy and its implications for monetary policy, with a particular focus on recent labor market data. He noted continued moderation in the labor market and progress toward the Federal Open Market Committee's (FOMC) 2 percent inflation goal, suggesting a shift in focus toward employment risks. Waller emphasized a data-dependent approach, reinforcing that monetary policy should not overreact to individual data points. Given recent economic data, he believes it is time to begin lowering the target range for the federal funds rate, suggesting a series of rate cuts might be appropriate to support continued economic and job growth, provided inflation remains near target levels. He acknowledged the challenge in determining the appropriate pace of rate cuts and remained open to adjusting monetary policy swiftly based on new economic information.


Positivity: 80
Uncertainty: 60

Schnabel - The euro area inflation outlook

Lecture by Isabel Schnabel, Member of the Executive Board of the ECB, at the Ragnar Nurkse Lecture Series organised by Eesti Pank in Tallinn, Estonia

In her lecture, Isabel Schnabel provided a comprehensive overview of the euro area’s disinflation process and its implications for future monetary policy. She highlighted the rapid decline in headline inflation from a high point of 10.6% in October 2022 to 2.6% by July 2024 while cautioning that domestic inflation remains elevated due to persistent price pressures in the services sector. Schnabel noted that services inflation is a global issue but emphasized its particular intensity in the euro area. She stressed the importance of economic projections for decision-making and pointed out that the Eurosystem staff projections indicate a return to the ECB's inflation target by 2025. Despite some positive indicators, Schnabel emphasized the need for monetary policy to remain focused on controlling inflation, taking into account uncertainties and external risks, including persistent price pressures in the services sector, labor market dynamics, and geopolitical uncertainties. Recent data support the baseline scenario of achieving price stability by 2025, but robust scenario analysis is crucial to manage the inherent uncertainties effectively.

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- Positivity: 70
- Uncertainty: 80