Martin Kocher advocates for ECB calm with policy in a 'good place'

The European Central Bank should take a calm approach to monetary policy, given inflation is in line with its target, according to Governing Council member Martin Kocher. 

“There is a good argument to be made for not adjusting policy rates, for not trying to over-engineer what we are doing as long as we are close to the 2%, as long as there is no shocks from the outside that might lead us to other conclusions,” he said on Thursday on the sidelines of the IMF’s annual meetings in Washington. “We are in a good place.” 

ECB officials have largely indicated that — after eight interest-rate cuts in a year — they are happy with current policy settings, though some are still saying further cuts shouldn’t be excluded. 

 

Kocher, who took over as Austria’s central-bank chief in September, argued that the euro area’s inflation outlook is “consistent” with the ECB’s 2% target and “pretty stable.”  

“It’s good to remain prudent and vigilant, but there’s no need to be overactive as soon as things change,” he said. “It’s important to have dry powder, acting power and quickly adjust policy according to what is coming.”