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3/31/2017, 12:54 PM (Source: TeleTrader)
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ECB's Coeure: Risks for growth going neutral

It wouldn't be a good idea to push inflation above target 2% to make up for the prior slow growth in consumer prices, according to one of the top officials of the European Central Bank. Board member Benoit Coeure told the audience on Friday, at an event organized in Brussels by Bruegel, that the balance of risks for growth moved toward neutral territory. However, he stressed core inflation in the Eurozone is still subdued and that the outlook for prices remains "highly conditional" on monetary policy measures.

The French economist said deflation pressures have been overcome and that the direction for the ECB is toward normalization, however he called for prudence and patience. Coeure underscored the current situation makes forward guidance on bond purchases and the strategy for the balance sheet still valid.

"Central banks can lead the markets and minimize the risk of being led by them. And by fostering the markets' understanding of our reaction function, we reduce market volatility and support both the effectiveness and predictability of monetary policy actions. Thus, we have maintained both 'easing biases' – the one on purchases and the one on key interest rates, i.e. meaning that rates could go lower," the central banker said.

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