ECB's Lautenschläger: Domestic price pressures are still subdued; the same is true for wages

Key highlights from the speech by Sabine Lautenschläger, Member of the Executive Board of the ECB and Vice-Chair of the Supervisory Board of the ECB, at the Bankwirtschaftliche Tagung of the BVR, Berlin, 31 May 2017:

• Monetary policy is often discussed very emotionally, and that makes it difficult to objectively weigh up the arguments
• We have to ensure price stability over the medium term. Otherwise, in a worst-case scenario, we might have to adjust monetary policy every six weeks. That would only increase the costs of monetary policy without bringing any benefit
• At the same time, domestic price pressures are still subdued; the same is true for wages. And there is something else: current inflation still contains an element of monetary policy
• The euro area economy is definitely improving. The recovery continues to firm and broaden, while the risks to growth, in my view, are now balanced.
• The return to “normal” monetary policy will not be straightforward
• Forward guidance should clearly signal to the market the future path of monetary policy