FRANKFURT, Jan 23 (Reuters) - The European Central Bank must be cautious in adjusting policy preemptively to mitigate uncertainty, Austrian central bank chief Martin Kocher told German media outlet
ECB's Kocher Advocates Caution in Preemptive Policy Adjustments
Caution in ECB Policy Adjustments
FRANKFURT, Jan 23 (Reuters) - The European Central Bank must be cautious in adjusting policy preemptively to mitigate uncertainty, Austrian central bank chief Martin Kocher told German media outlet Platow in an interview published on Friday.
Geopolitical uncertainty has increased sharply this month, partly on threats by U.S. President Donald Trump that he would take over Greenland and impose punitive tariffs on nations not going along with his plan.
But Kocher said he would be cautious in acting before risks actually materialised, especially if inflation risk were not clearly skewed in one particular direction.
Geopolitical Uncertainty
"I would be cautious," Kocher said. "Some risks can be addressed in advance, but many cannot, because otherwise one commits to a course of action too early and communication becomes difficult."
Current Market Expectations
He added risks had "shifted slightly to the positive" in the past six months, with slightly stronger growth expectations for the eurozone and stable financial markets.
"Now we have new developments again, but I would not reinterpret the initial situation within a week," Kocher said.
Markets currently expect no action from the ECB and see steady rates throughout 2026.
(Reporting by Balazs KoranyiEditing by Francesco Canepa)
