In an intervention at a conference in Berlin, the president of the German central bank stressed that he would be in favor of a rate cut in June if the data increased his confidence in inflation returning to the 2% target.
Nagel recalled that experts’ projections show that this will happen by 2025, but that he is not “fully convinced that inflation will effectively return to its objective in a timely and sustained manner”.
He explained that underlying inflation remains high, especially in the services sector, due to “continued strong wage growth”.
Therefore, the Governing Council will continue to make decisions on a meeting-by-meeting basis and based on incoming data, with the aim of restoring price stability soon.
During his speech in Berlin, Nagel also spoke about the digital euro, which is in the preparation phase and will not be introduced in the short term, but which, in his opinion, will be a success and will bring benefits to both traders and consumers.
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