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ECB’s Rehn calls for a change in inflation targeting in line with the Fed

(Reuters) – The European Central Bank should follow the US Federal Reserve and agree to exceed its inflation target to offset many years of slow price growth, Finnish central bank director Olli Rehn told the Financial Times.

According to Rehn, changes in the labor market in the euro zone and in the world economy have weakened wage inflation pressures and mean that “the economy can cope with lower levels of unemployment […] without rapid inflation, “Rehn was quoted as saying by the newspaper.

Rehn argued that, in addition to price stability, a focus on maximum or full employment makes sense in the current context of a lower natural interest rate.

(Report by Juby Babu in Bengaluru; Edited in Spanish by Javier López de Lérida)

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