- I think the inflation risk is lower this time around
- I think that we were late to act in 2021 and 2022
- One reason was that we had too much of an academic discussion about the drivers of inflation
- Academic discussions are good at university and in academic fora but in central banking, you have to take decisions
- We have to wait before deciding on the next interest rate move
- Need more clarity about the conflict in Iran
- My impression is that the data on growth over the coming weeks are not going to be good
- Energy shock is usually reflected in inflation indicators much more rapidly than in growth indicators
- That’s why I would call for prudence, we need additional clarity with respect to the conflict
- I have never tried to pre-empt the rate decision
- Let’s see the data over the coming weeks, let’s see the projections, let’s see what happens with the conflict
- Markets’ response has been quite calm and that is a positive thing
- A big repricing in asset markets would have been very detrimental, amplifying the impact of the energy shock
- Fiscal space is quite limited in the euro area at a time when we need to increase defence spending
- Overlooking this risk would be a mistake
- Full transcript
As a reminder, de Guindos will be seeing his term end at the end of this month. So, he can be a bit more bold with his commentary as is the case with all policymakers when they are set to depart from the central bank.
So far, he’s not saying too much though but is preaching patience and being more prudent. But in the bigger picture, I’m sure he knows very well too that the ECB cannot sit by idly for too long amid the shock to the inflation outlook.