ECB Officials Discuss Inflation and Interest Rates

European Central Bank (ECB) Governing Council Member Fabio Panetta emphasized the need for further interest rate cuts to avoid excessive inflation reduction, noting current restrictive monetary conditions in the Eurozone. Panetta highlighted the importance of addressing economic weaknesses as inflation dips below the target. In contrast, Bundesbank President Joachim Nagel warned against hasty rate cuts, advocating for a cautious approach, given the potential for services inflation to remain elevated. French central bank chief Francois Villeroy de Galhau supported a medium-term focus on the 2% inflation target, arguing that not all short-term deviations require immediate action. Overall, ECB policymakers are grappling with balancing inflation control while fostering economic recovery, with discussions on future rate strategies intensifying as they prepare for an upcoming forecast in December.