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Back to the future - forward-looking considerations on monetary policy normalization

· Fabio Panetta, Governor of the Banca d'Italia (Italy)

Summary written by Dark Majestic in its own words · topics: monetary policy and interest rates, inflation and price stability, trade, fragmentation and geopolitics

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· Fabio Panetta Wiki · Banca d'Italia WikiBack to the future - forward-looking considerations on monetary policy normalization

ContextSpeech at Bocconi University in Milan; the Bank of Italy safeguards price and financial stability and takes part in euro area decisions on lowering rates.

Why it mattersItaly's governor argues the ECB can normalise rates as inflation volatility falls.

Problems raised
  1. Tariffs could raise inflation.
  2. Some analysts see downside inflation risks.
  3. Policy must normalise.
Solutions proposed
  1. Normalise policy looking forward.
  2. Recognise inflation volatility has fallen.
  3. Watch risks in both directions.
Read full speech on bis.org ↗

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