Select Language

ECB's Nagel: Timely return to price stability cannot be taken for granted

blockHeadVisual
  1. HOME
  2. Get information
  3. World FX news
  4. ECB's Nagel: Timely return to price stability cannot be taken for granted

World FX news

search
Breaking news

ECB's Nagel: Timely return to price stability cannot be taken for granted

  • X
  • facebook
  • LINE
  • RSS
  • X
  • facebook
  • LINE
  • RSS
update 2024.08.30 09:31
ECB's Nagel: Timely return to price stability cannot be taken for granted

update 2024.08.30 09:31

The European Central Bank (ECB) policymaker Joachim Nagel said on Thursday that the ECB should avoid lowering interest rates too fast because it has yet to bring inflation down to 2% even if that goal is now in sight, per Reuters. 

Key quotes

There is the risk that a somewhat stronger recovery could delay a return to the inflation target.

While our 2% target is in sight, we have not reached it.

A timely return to price stability cannot be taken for granted. 

Market reaction

At the time of press, the EUR/USD pair was up 0.04% on the day at 1.1082. 

ECB FAQs

The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy for the region. The ECB primary mandate is to maintain price stability, which means keeping inflation at around 2%. Its primary tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will usually result in a stronger Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.

In extreme situations, the European Central Bank can enact a policy tool called Quantitative Easing. QE is the process by which the ECB prints Euros and uses them to buy assets - usually government or corporate bonds - from banks and other financial institutions. QE usually results in a weaker Euro. QE is a last resort when simply lowering interest rates is unlikely to achieve the objective of price stability. The ECB used it during the Great Financial Crisis in 2009-11, in 2015 when inflation remained stubbornly low, as well as during the covid pandemic.

Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the European Central Bank (ECB) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the ECB stops buying more bonds, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive (or bullish) for the Euro.

 

Date

Created

 : 2024.08.30

Update

Last updated

 : 2024.08.30

Related articles

Show more

Writer

FXStreet

Financial media

arrow
FXStreet

FXStreet is a forex information website, delivering market analysis and news articles 24/7.
It features a number of articles contributed by well-known analysts, in addition to the ones by its editorial team.
Founded in 2000 by Francesc Riverola, a Spanish economist, it has grown to become a world-renowned information website.

Was this article helpful?
No loading Yes loading

We hope you find this article useful. Any comments or suggestions will be greatly appreciated.  
We are also looking for writers with extensive experience in forex and crypto to join us.

please contact us at [email protected].

Thank you for your feedback.
Thank you for your feedback.

Previous article

prev

Ukraine closely watches Belarus border as troops amass

Next article

SNB's Jordan: Price stability is a crucial precondition for growth and prosperity

prev

Most viewed

Japan's Suzuki: Will continue to monitor, analyze impact of US rate cut on Japanese economy, financial markets

Japan's Finance Minister Shunichi Suzuki said on Friday that he "will continue to monitor and analyse impact of latest US rate cut on Japanese economy and financial markets." "FRB's view on US economy in line with Japanese government's view that the US economy is likely to expand," he added.
New
update2024.09.20 11:31

USD/INR weakens as likely inflows boost Indian Rupee

The Indian Rupee (INR) extends its upside on the weaker US Dollar (USD) on Friday.
New
update2024.09.20 11:22

Gold price consolidates near record high, bullish potential seems intact

Gold price (XAU/USD) regained positive traction on Thursday and rallied back closer to the all-time peak touched the previous day in reaction to the Federal Reserve's (Fed) decision to start the policy easing cycle with an oversized rate cut.
New
update2024.09.20 11:18

Japanese Yen holds gains ahead of the BoJ interest rate decision

The Japanese Yen (JPY) edges lower against the US Dollar (USD) following the National Consumer Price Index (CPI) data released on Friday.
New
update2024.09.20 10:42

PBOC sets USD/CNY reference rate at 7.0644 vs. 7.0983 previous

On Friday, the People's Bank of China (PBoC) set the USD/CNY central rate for the trading session ahead at 7.0644, as compared to the previous day's fix of 7.0983 and 7.0637 Reuters estimates.
New
update2024.09.20 10:16

WTI softens below $71.00, ongoing geopolitical tensions might cap its downside

West Texas Intermediate (WTI), the US crude Oil benchmark, is trading around $70.80 on Friday.
New
update2024.09.20 10:10

PBOC leaves Loan Prime Rates unchanged in September

The People's Bank of China (PBOC), China's central bank, announced to leave its Loan Prime Rates (LPRs) unchanged on Friday.
New
update2024.09.20 10:06

AUD/USD strengthens above 0.6800 on RBA-Fed policy divergence, eyes on PBoC rate decision

The AUD/USD pair trades on a stronger note near 0.6810 during the early Asian session on Friday.
New
update2024.09.20 09:12

Japan's National CPI climbs 3.0% YoY in August, Core CPI rises as expected

Japan's National Consumer Price Index (CPI) climbed 3.0% YoY in August, compared to the previous reading of 2.8%, according to the latest data released by the Japan Statistics Bureau on Friday, Further details unveil that the National CPI ex Fresh food arrived at 2.8% YoY in August versus 2.7% prior.
New
update2024.09.20 08:32

EUR/USD grapples with higher ground as Fed cuts weigh on Greenback

EUR/USD found the high end on Thursday, holding fast to the 1.1150 level, though most of the pair's bullish momentum comes from a broad-market selloff in the Greenback rather than any particular bullish fix in the Euro.
New
update2024.09.20 08:32

Disclaimer:arw

All information and content provided on this website is provided for informational purposes only and is not intended to solicit any investment. Although all efforts are made in order to ensure that the information is correct, no guarantee is provided for the accuracy of any content on this website. Any decision made shall be the responsibility of the investor and Myforex does not take any responsibility whatsoever regarding the use of any information provided herein.

The content provided on this website belongs to Myforex and, where stated, the relevant licensors. All rights are reserved by Myforex and the relevant licensors, and no content of this website, whether in full or in part, shall be copied or displayed elsewhere without the explicit written permission of the relevant copyright holder. If you wish to use any part of the content provided on this website, please ensure that you contact Myforex.

arw
  • Facebook
  • Twitter
  • LINE

Myforex uses cookies to improve the convenience and functionality of this website. This website may include cookies not only by us but also by third parties (advertisers, log analysts, etc.) for the purpose of tracking the activities of users. Cookie policy

I agree
share
Share
Line

Line
Facebook

Facebook
X

Twitter
Cancel