Draghi Says Firmly Convinced of Need for ECB Support

The transcript discusses the subdued nature of underlying inflation pressures and the insufficiency of domestic cost pressures, particularly from wages, to support a sustainable convergence of inflation towards the medium-term objective. It highlights the need for very accommodative financing conditions, which depend on substantial monetary accommodation. The upcoming June monetary policy meeting will provide an update on staff projections and a more complete information set for assessing growth and inflation risks. The transcript concludes by affirming the necessity of extraordinary monetary policy support to reabsorb underutilized resources and stabilize inflation around 2% in the medium term.

What is the current state of underlying inflation pressures?

• They have increased significantly.

• They have remained subdued.

• They are at an all-time high.

• They are unpredictable.

What is necessary for domestic price pressures to strengthen?

• Increased taxation

• Reduced government spending

• Accommodative financing conditions

• Higher import tariffs

What will the Guardian Council receive at its June monetary policy meeting?

• A new inflation target

• An update of the staff projections

• A report on global trade

• A summary of past policies

Why is extraordinary monetary policy support still necessary?

• To increase government revenue

• To stabilize inflation around 2%

• To reduce unemployment to zero

• To boost international trade

What role does forward guidance play in monetary policy?

• It increases interest rates.

• It is crucial for stabilizing inflation.

• It limits government spending.

• It helps in reducing taxes.