ECB's Kocher in a Bloomberg interview says that a lot has happened since the last ECB meeting in December; says "of course exchange rate matters"

Kocher's comments underscore the ECB's cautious stance amid high uncertainty, emphasizing the importance of maintaining flexibility in policy.

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ECB's Kocher in a Bloomberg interview says that a lot has happened since the last ECB meeting in December; says "of course exchange rate matters"

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  • Says uncertainty remains high.
  • Important to keep full optionality.
  • Need to act quickly and decisively.
  • Notes downside risk remains at large.
  • Modest Eurozone growth forecasts, supported by German stimulus and savings rate.
  • ECB is fine as long as deviations from 2% CPI are modest.
  • Euro appreciation was substantial over the past year.
  • Can't exclude anything on rates. 
  • At the moment, doing fine on rates. 
Context

His acknowledgment of recent euro appreciation and the need for quick action suggests potential for future rate adjustments should inflation deviate significantly from targets. This may heighten market sensitivity towards the euro and influence bond yields as traders assess the ECB's next moves.

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