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ECB’s New Guidance Can Boost Inflation Expectations, Lane Says
Published by maria gbaf
Posted on August 23, 2021
1 min readLast updated: February 15, 2026
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Published by maria gbaf
Posted on August 23, 2021
1 min readLast updated: February 15, 2026
Add as preferred source on GoogleFRANKFURT (Reuters) – The European Central Bank’s new policy guidance can boost inflation expectations, paving the ground to higher interest rates down the line, the ECB’s chief economist Philip Lane said on Thursday.
“The systematic approach to monetary policy embedded in rate forward guidance has the capacity to boost inflation expectations and thereby strengthen inflation dynamics,” Lane said in a blog post.
“In turn, stronger inflation dynamics are the key to eventual normalisation of policy rates.”
(Reporting By Francesco Canepa)
The ECB's new policy guidance aims to boost inflation expectations, which could pave the way for higher interest rates in the future.
According to ECB chief economist Lane, the systematic approach to monetary policy embedded in rate forward guidance has the capacity to enhance inflation expectations.
Stronger inflation dynamics are crucial for the eventual normalization of policy rates, as they indicate a healthier economic environment.
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