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| ECB Policymaker Says Wage Increases in Eurozone Still Compatible with Monetary Policy |
European Central Bank (ECB) policymaker, Mario Centeno, stated on Monday that the wage increase in the Eurozone is still in line with the monetary policy, and there are no signs of a second-round effect on wage-setting. The ECB's governing council member added that the bank is equipped with the necessary tools to take "whatever-it-takes" actions for banks.
Centeno reiterated that they have not seen a deanchoring of inflation expectations, despite recent price rises, which have led to concerns about a potential inflation surge. The ECB has maintained that it would not consider tightening monetary policy until inflation sustainably reaches its 2% target.
The statement from Centeno came amidst concerns that the recent wage increases could lead to inflationary pressures and force the ECB to tighten its monetary policy earlier than expected. However, the ECB policymaker's statement provided some relief to investors, resulting in a 0.3% increase in the EUR/USD pair, which was last seen trading at 1.0790.
The ECB is set to have its policy meeting on Thursday, where it will review its monetary policy stance, including its bond-buying program, which has helped support the Eurozone's economy during the pandemic. The bank is expected to maintain its accommodative policy stance despite concerns over rising inflation in the Eurozone.
