AMSTERDAM (Reuters) -Risks surrounding the euro zone inflation outlook are balanced and the current level of interest rates is appropriate, Dutch central bank chief Olaf Sleijpen told a news
ECB's Sleijpen: Current Interest Rates and Inflation Risks Remain Balanced
ECB's Current Economic Outlook
AMSTERDAM (Reuters) -Risks surrounding the euro zone inflation outlook are balanced and the current level of interest rates is appropriate, Dutch central bank chief Olaf Sleijpen told a news conference on Monday.
Inflation Trends in the Euro Zone
The ECB has left interest rates unchanged since June and markets expect no change even in December, when the ECB releases a fresh set of economic projections, which could show price growth going under the bank's 2% target next year.
Market Expectations for Interest Rates
"Inflation risks in the euro area are balanced," Sleijpen, one of the newest members of the ECB's rate-setting Governing Council, said.
Future Economic Projections
Euro zone inflation, hovering around the 2% target for most of this year, is set to dip below 2% in 2026 on a statistical base effect, and some policymakers fear that low price growth could get entrenched if firms adjust their wage and price-setting behaviour.
However, most policymakers have been downplaying the undershooting risk, solidifying market bets that the ECB is done cutting interest rates after halving the deposit rate to 2% in the year to June.
"Our December meeting will bring a lot of new data," Sleijpen said. "For now, I would say we are in a good place and if data remains consistent with the current picture in December I would see no reason to say we are no longer in a good place."
(Reporting by Bart Meijer; writing by Balazs Koranyi, Editing by William Maclean)
