Metzler Asset Management economist Edgar Walker says the ECB’s task is to anchor
market expectations that temporary shocks will not be permanently monetized, not
to respond to every price spike. That creates a policy dilemma: insufficient
action could be perceived as treating rising inf as merely an energy shock,
while overreaction could further strain an already fragile euro-area economy.
Walker says the appropriate response is credible policy flexibility rather than
bold forward guidance.
