BERLIN/FRANKFURT (Reuters) – The European Central Bank has tamed the “greedy beast” of inflation, ECB policymaker Joachim Nagel said on Tuesday, in a departure from his usual cautious tone.
The ECB has raised its interest rates by the most in the euro’s history in an effort to bring inflation down from double-digits. It was 2.9% at its latest reading and the bank is now widely expected to start cutting borrowing costs in the spring.
Nagel, who had previously described inflation as “stubborn” and a “greedy beast”, struck a more optimistic note on Tuesday.
“I am now convinced that we have tamed that greedy beast,” the Bundesbank’s president told an event in Berlin.
Still, he stopped far short of backing rate cuts, saying instead that the ECB should decide on any policy changes one meeting at a time and remain focused on incoming data.
Nagel also noted that core inflation remained relatively high and argued that the ECB’s current policy stance, which includes a record-high deposit rate of 4.0%, was not very restrictive.
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(Reporting By Frank Siebelt and Reinhard Becker; Writing by Francesco Canepa; Editing by Gareth Jones)