ECB’S PATSALIDES: INFLATION ON TRACK FOR 2% TARGET DESPITE GLOBAL UNCERTAINTY
European Central Bank’s Christodoulos Patsalides says the eurozone remains resilient amid geopolitical and trade-related headwinds. In a weekend interview, he emphasized that despite rising global instability, inflation is expected to align with the ECB’s 2% target over time. The recently announced EU-US trade deal could help reduce some of the market uncertainty.
While the ECB paused its rate-cut streak last month, Patsalides insisted that calling it a “pause” is premature, reaffirming the ECB’s data-dependent, meeting-by-meeting approach. His comments come as other ECB members — including Peter Kazimir, Martins Kazaks, and François Villeroy de Galhau — adopt a cautious tone, warning against premature rate cuts and underscoring the need for flexibility in monetary policy.
Ireland’s Gabriel Makhlouf echoed this sentiment, supporting a “wait-and-see” stance given stabilizing inflation and steady growth. However, he also cautioned that new U.S. tariffs on EU goods may pose a growth risk despite short-term clarity from the trade agreement.
With eurozone GDP rising just 0.1% in Q2, the ECB faces a delicate balance: support growth without reigniting inflation.