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ECB chief economist warns higher long-term rates will slow growth

Lane said medium-term inflation expectations remain de-anchored, and noted the ECB’s “middle path” stance for a measured monetary-policy response.

Reported · Written up by our desk · Central Banks

FXStreet highlights comments from European Central Bank Chief Economist Philip Lane warning that higher long-term rates will slow economic growth.

Lane also said medium-term inflation expectations are still de-anchored, and that underlying inflation indicators do not show an upward shift taking hold.

He added that the rise in long-term rates could reduce monetary policy pass-through more than projected, while demand destruction from high energy costs may limit how much ECB rates need to adjust.

FXStreet reported no immediate reaction in the euro after the remarks, with EUR/USD down 0.5% to slightly below 1.1200, citing French fiscal concerns.

Latest closeEUR/USD 1.126 ▼0.6%

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