Remarks by ECB executive board member, Isabel Schnabel

  • It is critical to maintain flexibility during transition period
  • Inflation risks are skewed towards the upside
  • The rate and extent of the fall in inflation is increasingly harder to determine
  • It is possible that inflation may fall below 2% target in the medium-term

She also adds that a return of additional virus restrictions may hinder economic activity in the short-term. What is being left unsaid is that as restrictions come back into place, that will also further weigh on supply and capacity constraints and in turn, result in higher cost pressures down the road as well. Ripple effect much.