Ella 
Klaas Knot, a member of the European Central Bank (ECB) Governing Council, voiced his endorsement for the current monetary policy during a panel discussion held in Slovakia. The ECB’s primary objective remains guiding inflation back to the 2% target, a task complicated by ongoing geopolitical disruptions that have the potential to result in economic fragmentation, necessitating further countermeasures against adverse supply shocks.
Knot affirmed that the ECB has effectively managed inflation in the face of these challenges. His support comes as the ECB’s unprecedented tightening campaign, characterized by a 10th consecutive deposit rate increase to 4%, appears to have drawn to a close.
Nevertheless, the conclusion of this tightening campaign coincides with a surge in borrowing costs and an uptick in government bond yields. These factors are heightening economic headwinds and placing pressure on borrowers. Despite these conditions, officials are optimistic about a “soft landing” for the economies within the 20-nation eurozone.
Reinforcing this outlook, Bostjan Vasle, the Governor of the Slovenian Central Bank, emphasized that although growth rates are moderating, overall sentiment remains firmly positive. This perspective bolsters confidence in the positive trajectory of the eurozone economies, indicating their resilience in the face of potential future economic shocks.
