European Central Bank (ECB) policymakers are reluctant to follow the US Federal Reserve with regards to the average inflation target, Reuters reported on Monday, citing sources involved in a revamp of the ECB’s policy strategy.
“We want flexibility so an average target would not really give us a benefit,” one of the sources told Reuters and noted that there was fear among policymakers that the average inflation target would create unrealistic expectations.
Market reaction
The EUR/USD pair showed no immediate reaction to this headline and was last seen losing 0.1% on a daily basis at 1.1810.