Not a given that ECB gets inflation back to target, Lane says By Reuters

JACKSON HOLE, Wyoming (Reuters) – It is not yet assured that the European Central Bank manages to lower inflation back to its 2% target, so restrictive monetary policy is still needed, ECB chief economist Philip Lane said on Saturday.

“The return to target is not yet secure,” Lane told the U.S. Federal Reserve’s annual economic symposium in Jackson Hole. “The monetary stance will have to remain in restrictive territory for as long as needed to shepherd the disinflation process towards a timely return to the target.”

But Lane also warned against keeping rates high for too long as that could deliver chronically below-target inflation.