ECB President Says Inflation is Below Target

Inflation in the euro zone is “way below” the European Central Bank’s goal and the longer it stays at such low levels the harder it will be to get it back up to the target, ECB President Mario Draghi said on Monday.

In prepared remarks for delivery to European lawmakers, Draghi said the ECB’s commitment to delivering price stability was reflected in medium- and longer-term inflation expectations “remaining firmly anchored”.

However, in a follow-up question and answer session, he said inflation risked becoming entrenched at low levels.

“Right now we have a level of inflation which is way below 2 percent,” Draghi told the European Parliament’s Committee on Economic and Monetary Affairs in the Q&A session.

“We know that the longer it stays at the current level, the higher will be the risk that it will not go back to 2 percent in any reasonable time – in other words, the longer will be the risk that inflation expectations could actually be disanchored, and we don’t want that.”


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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza