ECB Vice President: The risk of inflation being below the 2% target has not increased, and a "small deviation" can be tolerated.

On September 18, Jin10 reported that the Vice President of the European Central Bank, Luis de Guindos, stated that even though the latest forecasts show that inflation will be below the target of 2% for some time, the risk of inflation being “below target” has not increased. He pointed out that policymakers can accept a “slight deviation” from the target; if such deviations are considered temporary, they will “ignore them.” He stated that one of the biggest unresolved questions right now is what long-term impact U.S. tariff policies will have on prices. Last week, European Central Bank officials decided to keep interest rates unchanged at the second monetary policy meeting, believing that inflationary pressures are under control and economic risks are diminishing. Sources familiar with policymakers' thoughts revealed that unless the Eurozone faces a significant shock, borrowing costs (i.e., interest rates) will remain at current levels.