Inflation & Monetary Policy - The ECB believes it is currently in a good place regarding inflation, but there is no room for complacency as risks are two-sided [1] - The ECB's projection indicates that inflation is likely to be below target for 18 months, requiring vigilance to prevent it from becoming persistent [1][2][5] - The ECB is not committed to any particular rate buffer and will make decisions based on data dependency and meeting-by-meeting analysis [3] - The ECB is closely monitoring exchange rate developments, but the exchange rate is not a positive target; the mandate is price stability [5] - The appreciation of the euro has helped in reaching the 2% inflation target, but its persistence could affect the competitiveness of European export industries [6][8] Economic Outlook & Risks - Geopolitical tensions, the trade war, and artificial intelligence are significant factors influencing economic decisions [4] - The trade war's overall result is likely to increase inflation pressures in the US while dampening inflation in Europe due to a more subdued growth outlook [11][12] - The outcome of trade negotiations will impact the trajectory for the eurozone economy [9] Euro as a Reserve Currency - The Eurozone has stronger confidence in Europe and aims to turn this into concrete policy measures to support European industrial competitiveness and productivity growth [13][14] - The euro is already the number two reserve currency in the world and has real chances to become more important, potentially leading to structurally lower interest rates [15][16] - The Eurozone is willing to share some of the "exorbitant burden" of the international reserve currency currently held by the US dollar [16][17]

European Central Bank Governing Council member Mario Centeno says policymakers remain cautious despite inflation now being at the 2% target, stressing the ECB is not in a hurry to reduce borrowing costs further. Speaking to Bloomberg's Francine Lacqua on the sidelines of the ECB's annual retreat in Sintra, Portugal, Centeno also talks about the euro exchange rate and the importance of a potential trade deal. 00:00 - ECB Governing Council Member Mario Centeno on central bank rate cuts, inflation target 01:13 ...