Philip Lane, the chief economist of the European Central Bank, indicated that although the majority of factors suggested a continued decline in euro area inflation, there were also concerns, such as the possibility of unsuccessful EU-US trade negotiations, that could lead to an increase in inflation.
He stated in an interview with Germany’s Frankfurter Allgemeine newspaper that they needed to find a middle path when questioned about the implications for interest rate policy.
Lane added that they would respond with further interest rate cuts if they saw signs of further falling inflation. However, it was noted that the scope of the discussion is rather limited, with no one mentioning any significant reductions in rates. They stated that they are in a zone of normal central banking.