ECB's Sleijpen Sees Policy 'In a Good Place'

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00:00I want to start with that contrast, this incredible optimism that you're seeing in the U.S. economy,

00:04notwithstanding some of the recent credit cracks.

00:07And yet the Fed is going to cut rates several times.

00:09And in the euro region, it seems like the ECB members that we've spoken to seem pretty okay with where things are at right now.

00:16But there isn't that much optimism around growth.

00:19Does there seem like a dissonance there?

00:21Yeah, from a monetary policy point of view, we are in a good place.

00:23And you have been hearing that a lot, I think, these days, because inflation rate is basically around our target, 2% in the medium term.

00:34We have more or less full employment at the moment in the euro area.

00:39But having said that, the potential growth in the euro area is actually relatively low compared to the United States.

00:46I think not a lot needs to be done in this context, but that's not for monetary policy.

00:51It's more for structural policy.

00:53At the same time, the trade shocks that Christine Lagarde, that Madame Lagarde was talking about yesterday,

00:59have to do with both, yes, tariffs, but the tariffs have come in much less than people have expected,

01:04but also China flooding the European region with cheap goods that have suppressed inflation.

01:10I mean, how much is that a risk, the disinflationary risk, that you're taking increasingly seriously?

01:14Well, what we see is that the euro area economy, and I think that's also true for the global economy,

01:21has been much more resilient than we thought it would be, actually.

01:25Yes, if you look, like, go back to a year ago, the economy has worsened.

01:33But if you look to the spring, I think things look a little bit better than we thought.

01:38So, yes, the tariffs do have an impact.

01:41They have an impact on growth.

01:43They may have an impact on inflation, in particular, I would say, in the United States.

01:48But, yes, so far, the economy is holding up pretty well.

01:54At the same time, there are a lot of risks out there, and there's a lot of uncertainty.

01:59So, it's very important that we remain vigilant in this respect.