ECBs Schnabel: Return to 2% target in a timely manner is becoming more and more likely

ECB’s Schanbel is speaking. Some highlights from her speech:

• Monetary policy cannot solve structural problems
• Return to 2% target in a timely manner is becoming more and more likely despite elevated services inflation and strong wage growth
• Growth in the euro area has become increasingly uneven in recent years.
• Monetary policy may contribute to rising heterogeneity, but it is not the main driver.
• Structural headwinds are holding back growth in some countries more than others.
• Signs of softening labor demand and progress in disinflation suggest inflation could sustainably fall back to the 2% target.
• Elevated services inflation and strong wage growth persist.
• Monetary policy alone cannot resolve structural issues.
• European governments must turn current challenges into opportunities.
• Europe has previously demonstrated its ability to adjust and rebound from adversity.
• Escaping stagnation requires action at both national and European levels.
• Focus on innovation, entrepreneurship, competition, and business dynamism is needed.
• Strengthening the Single Market, improving access to private equity, and reducing bureaucracy are critical.
• The green transition should be leveraged to advance innovation and regain price competitiveness.
• Policies must incentivize labor participation and preserve a skilled workforce through immigration and education.
• These efforts will strengthen the euro area.

This article was written by Greg Michalowski at www.forexlive.com.