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2026-05-25 16:07:11
[ECB Governing Council Member Stournaras: Cautious Shift to Restrictive Policy Should Be Considered if Inflation Temporarily Exceeds Target] ⑴ ECB Governing Council member Stournaras stated on Monday that if the eurozone inflation rate temporarily but significantly exceeds the ECB's target, monetary policy should be cautiously adjusted towards a more restrictive direction. ⑵ Stournaras pointed out that the blockade of the Strait of Hormuz during the ongoing conflict with Iran has led to a surge in oil and gas prices, which could have secondary effects on wages and the prices of goods and services. ⑶ "If the inflation rate significantly but only temporarily exceeds the target level, the policy response should remain balanced; that is, monetary policy should be cautiously adjusted towards a more restrictive direction to curb the strength of the second-round effect while avoiding excessive damage to economic activity." ⑷ He added that it is essential to ensure that inflation returns to the ECB's 2% medium-term target while avoiding overly restrictive monetary policy that burdens economic activity and investment.
