ECB Governing Council’s Makhlouf Downplays Inflation Worries

ECB’s Makhlouf: “It Is an Exaggeration to Say I Am Worried on Price Trajectory”

By IFCCI News Desk
Data verified and updated as of November 2025

European Central Bank Governing Council member Gabriel Makhlouf pushed back against suggestions that policymakers are increasingly anxious about the eurozone’s price outlook, stating that it is “an exaggeration” to claim he is worried about the current inflation trajectory. His comments arrive amid renewed market debate over whether the ECB may be forced to adjust its policy stance sooner than anticipated.

Speaking at a policy forum, Makhlouf emphasised that the inflation path remains broadly aligned with the ECB’s projections and that recent data do not signal meaningful deviations from the medium-term outlook.

Inflation Path Seen as Consistent With ECB Projections

Makhlouf noted that although certain price components remain volatile, overall inflation indicators show continued moderation:

• Core inflation is easing steadily
• Supply chain pressures have normalised
• Wage growth is stabilising in several large economies
• Energy price volatility has subsided compared to last year

He stressed that policymakers must avoid overreacting to short-term fluctuations, particularly in a period where base effects and seasonal dynamics can distort headline readings.

Markets Reassess Rate-Cut Expectations

Financial markets had recently increased bets on a more dovish tilt due to softer consumption data and pockets of industrial weakness across the euro area. Makhlouf’s remarks, however, suggest that the ECB is not inclined to accelerate easing unless the inflation trajectory diverges materially from its baseline.

Traders responded with modest adjustments in rate expectations, with short-term eurozone yields edging slightly higher as markets interpreted the statement as a signal of policy stability rather than imminent easing.

Policy Caution Remains the Guiding Principle

While downplaying concerns, Makhlouf reiterated the ECB’s commitment to a data-driven approach. He reaffirmed that:

• The ECB is closely monitoring wage settlements
• Services inflation remains a key variable
• Global demand conditions continue to influence price pressures
• The Governing Council seeks to avoid premature conclusions

Makhlouf also highlighted the need for prudence, stating that global uncertainties — including fiscal dynamics and geopolitical tensions — continue to shape the eurozone inflation environment.

Euro Reaction: Limited but Stable

The euro showed a muted but stabilising response following Makhlouf’s comments. EUR/USD held near recent ranges as markets priced in slower policy shifts and reduced speculation around large-scale easing.

Analysts note that the remarks reinforce the ECB’s message of steady, measured policy management rather than heightened alarm.

IFCCI Commentary

For financial advisers and analysts, Makhlouf’s position signals continuity in the ECB’s broader strategy:

• A controlled inflation downtrend
• A reluctance to commit to early easing
• A preference for incremental policy adjustments based on confirmed data

The statement suggests that barring a significant downturn, the ECB is likely to maintain its current posture into the next quarter.