European Central Bank Governing Council member Klaas Knot said on Thursday that, in his opinion, there is a strong case for using projection meetings to recalibrate policy stance. He also argued that still-high uncertainty warrants a data-dependent approach. The official, however, highlighted that the ECB's policymakers have to avoid any commitments on a specific future rate path, given the current environment.
Knot noted that the disinflation process in the euro area is well underway and is expected to remain bumpy at the least for the rest of this year. He added that flexibility could allow the ECB's policymakers to look through small deviations from its target as long as they respond especially forcefully to larger deviations.
Knot also said that just under three rate cuts priced in by markets for 2024 are broadly in line with the optimal policy path calculated by the ECB's staff.