ECB's Progress Towards Inflation Target

Peter Kazimir, a member of the European Central Bank (ECB) Governing Council, announced on Tuesday that the ECB is on the verge of achieving its inflation target. This milestone is expected to be reached in the coming months, marking a significant step in the bank's monetary policy efforts.

Monetary Policy Shifts to Neutral Zone

Kazimir highlighted that recent cuts in key interest rates have transitioned the ECB's monetary policy into a "neutral zone." This shift means the policy is no longer restrictive and does not hinder economic activity, as detailed in his blog post on the National Bank of Slovakia's website.

Challenges in a Chaotic Economic Environment

Despite the progress, Kazimir warned of the challenges posed by the current "chaotic environment." He stressed the importance of a measured response to external pressures, such as US reciprocal tariffs, to maintain price stability in Europe.

Uncertainty and Tension in the Economy

"We are once again navigating through an era of sudden changes and shocks," Kazimir remarked, pointing to the significant uncertainty and unpredictability affecting the global economy.