The European Central Bank should not adjust policy in the case of small deviations from its inflation target and should instead focus on the big picture, ECB policymaker Peter Kazimir said on Monday.
"We need to stay away from moving on small, tiny deviations from the target because we know they will come," Kazimir said in a blog post. "We need to stay focused on what's beyond these temporary wobbles."
The ECB's strategy allows for "inevitable" short-term deviations from its 2% target and calls for action only in case of large, sustained under or overshooting, a standard vague enough to leave room for debate.
The bank's own projections show inflation below 2% for six straight quarters from the start of 2026 and some policymakers argue that this is long enough for firms to change their pricing and wage-setting behaviour, risking entrenching anaemic price growth.
But Kazimir, a policy hawk who has cautioned against easing too much, warned that risks were also to the upside and the ECB would err by ignoring this.
Financial investors now see just a 40% chance of one final rate cut, sometime in the spring, adding to policy easing worth 2 percentage points in the year to June.
Repeating the bank's long-standing guidance, Kazimir said he remained open minded about future policy decisions, which would be taken meeting by meeting, based on incoming data.
"Monetary policy must remain nimble," Kazimir said. "We are free, with our hands fully untied, to do whatever is necessary to preserve stability."
