ECB's Smets Says 'Absolutely' Have to Anchor Inflation Expectations

The transcript discusses the European Central Bank's (ECB) focus on balancing employment and inflation, despite its primary mandate being price stability. It highlights the ECB's efforts through quantitative easing and negative interest rates to achieve inflation targets. The discussion also touches on the potential risks of low interest rates leading to asset bubbles and the importance of financial stability for economic growth.

What is the primary mandate of the ECB according to the first section?

• Employment growth

• Price stability

• Financial stability

• Economic expansion

What factors are contributing to the decline in the natural interest rate?

• Government policies

• Technological advancements

• Aging population

• Increased savings

What measures has the ECB taken to spur inflation?

• Reducing government spending

• Increasing taxes

• Bond purchases and quantitative easing

• Raising interest rates

What is the ECB's stance on the effectiveness of its policies?

• They have been partially successful

• They have been successful

• They have been ineffective

• They have been detrimental

What potential issue is associated with low interest rates?

• Asset price bubbles

• Deflation

• Currency devaluation

• Increased unemployment