Central Bank Intends to Maintain Necessary Measures for Achieving Inflation Target, According to Nagel's Statement
Fireside Chats in Milan: Eurozone Inflation Update and ECB's Strategy
Stepping into the bustling city of Milan, high-ranking European Central Bank (ECB) figures shared insights on the bank's mission and strategies regarding inflation.
At the Young Factor student conference, ECB Governing Council member Joachim Nagel, also president of the Bundesbank, expressed optimism, "This year, we're closing in on our objective - an average of 2% inflation. I'd say that's mission accomplished, more or less."
As previously reported by Eurostat, the eurozone's annual inflation rate dropped from 2.2% in April to 1.9% in May.
Expounding on the ECB's role, Nagel said, "Inflation at 2% is the best thing we can do for the economy. We're now in neutral territory, and I believe we're on the right track with monetary policy. We'll do what's necessary, just as we've done before."
ECB Vice President Luis de Guindos also chimed in, emphasizing the bank's data-driven, meeting-by-meeting approach to monetary policy. Given the geopolitical uncertainties, they would remain flexible and adapt as needed.
Furthermore, Bank of Italy Governor Fabio Panetta highlighted a flexible approach, predicting that eurozone inflation might fall short of the ECB's 2% target for an extended period. Meanwhile, Bank of Portugal Governor Mario Centeno warned that weak economic growth in the eurozone could hinder inflation from reaching the desired level.
However, Nagel underscored the ECB's primary mandate was based on ensuring price stability. He added, "We do our part. Once that's done, it's up to the politicians to finish the job."
Reflecting the current inflation outlook and the dynamics of underlying inflation, ECB's June 5 decision involved lowering its three key interest rates to accommodate the observed disinflationary pressures. The ECB plans to continue adjusting rates cautiously, aiming to achieve its objectives while balancing economic growth and inflation expectations.
In essence, the ECB's monetary policy stance is one of measured easing, oriented towards achieving its medium-term inflation target of 2% while accounting for the uncertainties and economic developments in the eurozone.
[1] ECB (2025). "ECB announces rate cut and addresses economic outlook."
[2] EUROSTAT (2025). "Eurostat releases new inflation data for the eurozone."
[3] Deutsche Bundesbank (2025). "Press release: Bundesbank President Joachim Nagel speaks at Young Factor conference."
- The ECB's monetary policy stance, as discussed during the Fireside Chats in Milan, aims for a measured easing to achieve the medium-term inflation target of 2%, while aligning with the economic growth and inflation expectations of the eurozone finance landscape and business sector.
- ECB Governing Council member and Bundesbank President Joachim Nagel, during the Young Factor student conference, spoke about the bank's modest success in closing in on its inflation objective, stating that 2% inflation is the best thing for the economy, and the ECB will adjust monetary policy as needed to maintain this growth-oriented inflation rate.
