During a hearing in the Greek parliament, ECB policymaker Yiannis Stournaras emphasized the need for a balanced approach to monetary policy in response to potential inflation spikes. He highlighted that the ongoing conflict in Iran has caused a surge in oil and natural gas prices, which could lead to increased wages and higher prices for goods and services.
Stournaras stated that if inflation temporarily overshoots the ECB's medium-term target of 2%, the response should be a cautious tightening of monetary policy. This adjustment aims to mitigate second-round effects on the economy while avoiding excessive restrictions that could hinder economic activity and investment.
His comments come as the Greek government has proposed extending his term as the governor of Greece's central bank