- It was argued that it was important to put the recent appreciation of the euro into a broader perspective
- Recent moves could be seen more as fluctuations of a temporary nature than as part of a consistent trend in one direction
- This would imply that the passthrough to consumer prices should be low given the way in which firms typically priced their goods in the face of exchange rate volatility
- Doubts were expressed about whether the euro’s performance could really be attributed to underlying strength of the euro area economy
- An alternative interpretation of the euro’s performance was that it in fact reflected a fundamental weakness of the dollar
- Geopolitical risks were very high and warranted close attention
- The implications for fiscal policy were also becoming increasingly relevant, as geopolitical tensions could require even more spending on defence
- It remained difficult to assess many of these risks because their likelihood and economic impact were difficult to quantify
- It was contended that the resilience of the euro area economy meant that it remained in relatively good shape
- However, it was also argued that growth had remained weak overall and vulnerable to several downside risks
- Members assessed that risks to economic growth had become more balanced
- Members welcomed the fact that inflation had now been hovering around 2% for a number of months
- Risks surrounding the inflation outlook were identified on both sides
- However, it was also contended that risks surrounding the inflation outlook were rather low since many of them had been partly defused
- Several members viewed inflation risks as tilted to the downside over the medium-term
- A few members viewed inflation risks as tilted to the upside over the medium-term
- But members concurred that the standard measures remained consistent with the 2% medium-term target
- It was argued that the current level of interest rates should be seen as sufficiently robust in managing shocks, in view of two-sided inflation risks
- Overall, there continued to be a high option value to waiting for more information
- Full accounts
The central bank meeting minutes are almost never a market-moving release given that it's old data by the time they get released. In fact, there's nothing here that we didn't already know.
