According to the Wisdom News APP, Isabel Schnabel, a member of the Executive Board of the European Central Bank, recently gave a speech emphasizing the uncertainty of inflation, which requires the European Central Bank to maintain flexibility in interest rate decisions. In the award ceremony held in Kiel, Germany, Schnabel pointed out that new inflation risks could arise at any time. Therefore, the European Central Bank has not set a fixed interest rate path, but continues to rely on real-time data to make a response.

Although the European Central Bank lowered borrowing costs earlier this month, officials did not explicitly state whether this was the last interest rate cut, nor did they provide specific guidance on the speed of interest rate cuts. Most officials have emphasized the continued risk of inflation and advocated cautious monetary policy.

Schnabel mentioned that the process of deflation may be challenging, describing it as the "difficult last mile". She pointed out that although inflation in commodity prices is slowing down rapidly, the pressure on service prices is even more severe.

According to the European Central Bank's latest forecast, consumer price growth is expected to reach the target of 2% in the last quarter of 2025. The inflation rate accelerated to 2.6% in May, but Bloomberg Economics' Nowcast predicts that the inflation rate will drop to 2.2% in June.

Schnabel believes that recent economic trends have been positive, but she also warns that geopolitical risks and the impact of climate change, such as Switzerland's recent landslides, may become potential supply-side shocks. In addition, the hoarding of the labor market has always affected labor productivity and weakened the transmission effect of monetary policy.

Nevertheless, Schnabel believes that inflation is currently falling and wage growth is gradually slowing down, and there are no signs of a wage-price spiral like in the 1970s. She believes that this is because the European Central Bank has successfully stabilized inflation expectations of enterprises and households at the target of 2%. She also mentioned that companies have begun to absorb higher wage costs in their profit margins.

Overall, Schnabel's speech conveyed a message: In the face of constantly changing economic environment and potential new shocks, the European Central Bank will remain vigilant and flexibly adjust its monetary policy according to real-time data.

It is worth mentioning that Schnabel's views coincide with those of Klaas Knot, a member of the Governing Council of the European Central Bank, on the need for interest rate decisions to rely on data. Last Thursday, Knot stated that officials have "insufficient experience" in gradually relaxing monetary policy and are faced with high uncertainty and structural changes in the global economy, requiring a "data-dependent approach".

He stated that this means that the ECB will have to "wait for incoming data, including new forecasts, and then make the corresponding decisions." "Given the current environment, we must still avoid making any commitments to specific future rate paths."