- All members viewed the risks surrounding the inflation outlook as being to the upside relative to the staff baseline projections
- It was suggested that the evolution of underlying inflation dynamics was indicative of persistent rather than temporary underlying price pressures
- It was suggested that it would be misleading to look at current headline inflation in isolation
- Underlying inflation, while very relevant for monetary policy, was not the same concept as medium-term inflation
- Core inflation and non-energy inflation were expected to peak in 2027 and then decline
- Therefore, the rise in underlying inflation could be viewed as only reflecting a lagged adjustment to the original shock, which did not preclude inflation from returning to target in the medium-term, assuming sufficient monetary policy action
- It was suggested that recent indicators of wage growth had been less responsive to recent developments than previously expected
- This could imply that the risk of second-round effects via wages was lower than thought
- The latest rate hike should not be seen as an insurance hike but rather as a decision that was robust across the baseline outlook
- Members reiterated that future interest rate decisions would continue to be based on its assessment of the inflation outlook and the risks surrounding it
- To continue to follow a data-dependent and meeting-by-meeting approach
- Given the continuing high uncertainty, it was important to refrain from giving any guidance regarding the future interest rate path
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This article was written by fl9bde53b91e184082bbe3aa3acaaf2cb0 at investinglive.com.