Isabel Schnabel of the European Central Bank (ECB) has made several key economic and policy remarks in her speech today, reflecting the ECB's cautious approach towards monetary policy amid changing economic conditions:
- Financial market repricing of rates over last few months shows investors expect policymakers, at least for now, to continue to pay more attention to actual inflation outcomes
- It could be prudent to continue to consider the baseline forecast as just on communication, even as inflation continues to fall.
- Regular inconsistent use of alternative scenarios could better convey the uncertainty facing central banks
