ECB policymakers repeat policy is in "good place"; ease tone on euro's strength

After the ECB policy meeting, policymakers share their views regarding monetary policy and the economy. The ECB held interest rates steady as expected, with President Lagarde notably acknowledging the euro's gains, particularly after breaking through the 1.20 level against the USD. Stournaras stated the economy is in stable equilibrium, noting that the euro's increase hasn't been dramatic. He dismissed January's slightly lower inflation data, while Escriva reiterated that inflation is at target. Villeroy recognized stability around inflation but highlighted increased downside risks. Furthermore, Kazaks warned that a significant and rapid strengthening of the euro could necessitate a policy response from the ECB. Given the recent easing of the euro back to around 1.18, the ECB seems less concerned currently, with the 1.20 level still a critical focus, suggesting future inflation data could influence rate cut expectations.