Who’s Afraid of Low Inflation?
The fact that eurozone inflation is closer to 1% than 2% is not ideal, but the European Central Bank should not be overly concerned. The ECB does not need to pull out all the stops and invent ever more instruments in the forlorn hope of increasing inflation by a few tenths of a percentage point.
https://prosyn.org/j32sCJ9
BRUSSELS – A year ago, the European Central Bank took advantage of a temporary uptick in prices to declare victory in its fight to bring eurozone inflation up to its target of “below, but close to, 2%.” But the triumph proved short-lived. Headline inflation has since come down again, and core inflation, which strips out volatile energy prices, is back to about 1%. Yet this should not be a major concern for the ECB.