Bank of Italy, Visco: “You don’t need a recession to bring inflation back to 2%”
Stop the scaremongering on rate hikes announced by the Bcentral European hip to guide Christine Lagarde. For the governor of the Bank of Italy, Ignazio Visco, Italy will hold the squeeze, thanks to the “prudent” economic and political strategy already undertaken. “Alarms are sometimes raised about the effects that further rate hikes may have on our economy are not shared: the our country is capablecontinuing on the path already taken of prudent policies and reforms, to manage the consequences of a gradual but necessary monetary tightening“, declared the governor of the Bank of Italy speaking at the round table “The challenges of the Italian economy in the current European context” organized by the Ambrosetti club. “I do not agree with some statements which maintain that in the euro area only a more or less deep recession will allow inflation to be brought back in line with our objective of stable prices”, he remarked Visco.
“I think it entirely possible that, as is happening in other countries and as it is moreover in line with our forecasts, price growthwhich is already showing signs of decline, may back to 2 percent without our measures causing particularly serious damage to production and employment, which would end up making it more difficult to achieve our mandate in the medium term”, added Visco. According to the number one of Bankitalia, therefore, “further rate hikes are in the works, but they will continue to be need careful evaluations and aware of the intensity and timing of their transmission to all euro area economies”.
Yellen (USA): “Inflation is falling, there are signs of hope”
But not only Bank of Italy. Even overseas, optimism is growing for an imminent economic recovery. To pay the encouraging data on theUS inflation. Labor market strength and inflation easing in the US are”signs of great hope“said the Treasury secretary, Janet Yellen, speaking with journalists during a visit to Zambia, according to reports by the international news agency Reuters. “I think in the United States we continue to see a strong job market And progress on the inflation frontso these are hopeful signs,” Yellen said. “We are seeing some signs of services inflation that need to continue. Attentionbut overall I think inflation is coming down,” Yellen stressed.
ECB, Lagarde reiterates: “Significant increases are on the way”
Meanwhile the president of the ECB Christine Lagarde at an event organized by the Deutsche Börse in Eschborn he reiterated the Eurotower’s “hawkish” line: “We have to bring inflation down. And we will achieve this. In less than six months we raised interest rates by 250 points basis, the fastest increase in our history. And we have clearly indicated that interest rates will still need to rise significantly at a steady pace to reach tight enough levels and stay at those levels for as long as needed. In other words, we will stay on course to ensure the timely return of inflation to our target”.
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