ECB’s Knot: Inflation dynamics may cause considerable challenges

European Central Bank (ECB) Governing Council member and head of the Dutch central bank De Nederlandsche Bank (DNB) Klass Knot noted on Wednesday that the current outlook on European inflation is murky, making it difficult for the ECB to engage in direct moves.

Key highlights

Medium-term inflation outlook is more ambiguous.

Near-term growth and inflation risks are to the downside.

Monetary-policy stance should be neutral.

Inflation dynamics may cause considerable challenges.