A senior European Central Bank official said that the European Central Bank should accept the Fed’s leadership and accept overspending of its inflation target to compensate for years of weak price growth.

The chairman of the European Central Bank’s interest rate setting committee and the governor of the Central Bank of Finland, Olli Rehn, told the Financial Times that changes in the labor market in the euro zone and the world economy have weakened wage inflation pressures, which means that “the economy can cope with more Low unemployment rate… There is no rapid inflation.”

“If this is the case, from the perspective of economic and social welfare, accept a certain period of time [inflation] Ren said. “This is why in addition to price stability, it makes sense to focus on full or maximum employment in the context of the current low natural interest rate.”

Despite lowering interest rates to a negative range and purchasing more than 4 billion euros in bonds, the European Central Bank has failed to achieve an inflation target close to but below 2% for most of the past decade.

Rehn said that the wording of the target “produces an understanding of asymmetry and some ambiguity.” The Bank of Finland estimates that the ECB’s actual inflation target is 1.6% to 1.8%, and Rehn added: “Worse, people think that 2% is the upper limit, which is weakening inflation expectations.”

It is widely expected that the European Central Bank will change its inflation target this fall, at the end of the agency’s first strategic review in 18 years. The EU treaty that established the European Central Bank sets its main task as price stability, and it decides how to define price stability. It initially set the target to keep the inflation rate below 2%, but later changed it to be close to but below 2%.

Last year, the Federal Reserve completed its own Strategy review And promised to let inflation exceed its target to make up for a period of poor performance, Tested position Because the rate of price increase is expected to exceed the 2% target for this year.

Other members of the European Central Bank Council also delivered speeches, expressing their support for the Fed’s move. Philip Lane, Chief Economist of the European Central Bank Tell the British “Financial Times” Recently, “there is a strong logic” for the Fed-style flexible average inflation target.

The euro zone’s inflation rate rebounded in April, Rise to 1.6%, After becoming negative in the last few months of last year. The European Central Bank predicts that prices will rise by more than 2% later this year, then decline next year, and will still be below the target by 2023.

If the ECB turns to accept a period when the inflation rate exceeds its target, then as the euro zone economy recovers from the effects of the coronavirus pandemic, the ECB will have greater flexibility to continue buying bonds.

The central bank said it would end the 185 million euro emergency bond purchase program that it launched last year when it believed that the pandemic crisis was over. Prior to this, it has been committed to maintaining “favorable financing conditions” through the purchase of bonds, which analysts interpret as meaning that its purpose is to keep bond yields at a low level.

As part of this month’s strategic review, the Council of the European Central Bank will hold a seminar on the interaction between monetary policy and fiscal policy this month. Rehn said this is likely to include discussing how the two will interact as the economy emerges from the crisis.

He said that the European Central Bank should change into a different role after this critical period, and he compared it with the critical period of the European Central Bank. freeOr a sweeper in a football game-a player who roams behind the defensive line to pick up stray balls and loop them back to the attacker. Rehn played football for the Finnish first team in his youth and is now the Vice-Chairman of the FIFA Governance Committee.

“If you look at the policy mix of fiscal and monetary policies to get rid of the crisis… Monetary policy should work free In a sense, it will ensure favorable financing conditions so that we will continue to provide bridges for troubled water. “

Rehn added that the government’s plan to reduce its debt level is “very important”, which has risen sharply due to the pandemic. “Europe still needs a very loose monetary policy. However, this position will not be maintained forever, and at some point, the organization’s funding costs [eurozone’s] Sovereign countries will increase. “He says.

Rehn is a former Finnish Minister of Economic Affairs. He served as European Commissioner for Economic and Monetary Affairs during the Eurozone sovereign debt crisis in 2012. At that time, he assisted in negotiating austerity measures for Greece as part of his rescue plan.