ECB’s Lane: Downside Growth Risks Have Not Materialized

Lane's pushback on fiscal expansion as an inflation remedy signals the ECB is wary of member states loosening budgets while price stability remains the priority. The acknowledgement that downside growth risks haven't materialized gives the central bank room to hold a restrictive stance without appearing to ignore the economy. For euro-area rates and the currency, the open question is whether this framing survives upcoming growth and inflation prints.