The European Central Bank (ECB) will need to see proof of slowing wage growth in the euro zone before interest rates can be lowered, ECB governing council member Klaas Knot said on Sunday.

“We now have a credible prospect that inflation will return to 2% in 2025. The only piece that’s missing is the conviction that wage growth will adapt to that lower inflation”, the Dutch central bank governor said in an interview with Dutch TV program Buitenhof.

“As soon as that piece of the puzzle falls in place, we will be able to lower interest rates a bit.”

  • aberrate_junior_beatnik@midwest.socialEnglish
    4·
    5 months ago

    But sure, keep thinking you understand the issue better than people who have studied everything about the issue and are actually paid for their knowledge.

    Actually, looking at the source, they openly disagree with you. Here is what they say:

    “We now have a credible prospect that inflation will return to 2% in 2025. The only piece that’s missing is the conviction that wage growth will adapt to that lower inflation”, the Dutch central bank governor said in an interview with Dutch TV program Buitenhof.

    They are saying inflation is going down, but wage growth may not be. In other words, they aren’t keeping interest rates high to combat inflation, they are doing so to combat wage growth and wage growth alone. The only person here who thinks wage growth and inflation move in lockstep is you.