Main comment:
In terms of an overall evaluation of our policy trajectory, we need to
be further along in the disinflation process before we can be
sufficiently confident that inflation will hit the target in a timely
manner and settle at target sustainably.
More:
- The incoming data suggest that the process of disinflation in the near
term in fact may run faster than previously expected, although the
implications for medium-term inflation are less clear - monetary policy needs to carefully balance the risk of overtightening by
keeping rates too high for too long against the risk of prematurely
moving away from the hold-steady position that we have been in since
September. - Many wage agreements will be renewed in the early months of 2024, and
updates to the wage trackers will provide essential information in
projecting wage dynamics - The available survey indicators are broadly consistent with the
decreasing wage profile foreseen in the latest Eurosystem staff
projections - According to our most recent discussions with large European
non-financial corporations, the wage growth expectations of this set of
companies for 2024 are 4.4 percent on average, which is a marked easing
compared to the average 2023 wage growth of 5.3 per cent
What the ECB is watching:
This article was written by Adam Button at www.forexlive.com.
