Is the ECB’s confidence in the inflation outlook warranted?

While ECB President Mario Draghi sounded positive on the outlook for inflation at this week’s press conference, he did so with a justified degree of caution. After all, there is still economic slack in some member states that will keep a lid on wage growth, while the euro’s rise threatens to dampen imported inflation. As a result, we expect the ECB to continue to stress that interest rate hikes remain a long way off.