Inflation will not Subside on Its Own, According to Schnabel at the ECB

EnclaveFX Ltd
Jan 10, 2023

In a statement on Tuesday, ECB Governing Council member Isabel Schnabel said that an approach to monetary policy that is restrictive over the long term will benefit society by stabilizing prices in the short to medium term.

Key takeaways

It is unlikely that inflation will subside on its own.

The use of higher interest rates as a scapegoat for a further delay in the green transition would be misleading.

"It will be necessary to impose stricter financing conditions."

In the future, green-targeted lending operations may prove useful, but at present, they are not an option.

In this regard, the systematic greening of the ECB's collateral framework is an effective strategy.

The reaction to the market

As a result of these comments, the EUR/USD has not responded immediately and was last seen posting small daily gains at 1.0745.


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