MADRID – European Central Bank policymaker Pablo Hernandez de Cos on Thursday said that any premature tightening of monetary policy would only hurt the economy and stimulus should be withdrawn gradually.
“The direction in which we need to head is clear, but we should not draw premature conclusions as to the time frame. The process will be both gradual and data-dependent,” De Cos told a financial event.
On Wednesday, two European Central Bank officials made the case for ending the ECB’s bond buying scheme as high inflation in the euro zone lessens the case for adding stimulus to the economy.
Although inflation is now more than twice the ECB’s 2% target, the bank has kept policy especially loose on the assumption that inflation will fall back below target next year without any action.
(Reporting by Jesús Aguado and Emma Pinedo; editing by Francesco Canepa)