Bank of Italy's Visco: We Don't Need to Have a Recession

The transcript discusses the European Central Bank's (ECB) approach to adjusting interest rates, emphasizing a gradual reduction from 75 to 25 basis points per meeting. It highlights the importance of maintaining price stability without causing a recession and the need for a balanced approach based on incoming data. The discussion also covers the impact of unexpected events like the Ukraine war on inflation projections and energy prices. Additionally, it addresses concerns about the pace of bond portfolio reduction, advocating for a prudent and patient approach in monetary policy.

What is the ECB's current approach to adjusting interest rates?

• Maintaining a constant rate

• Increasing rates by 75 points per meeting

• Gradually reducing the rate of increase

• Cutting rates immediately

According to the speaker, what is necessary to avoid a recession while disinflating the economy?

• Implementing aggressive rate cuts

• Balancing monetary policy actions

• Focusing solely on inflation

• Ignoring incoming information

What does the speaker identify as a major factor affecting the ECB's projections?

• A decrease in government spending

• A sudden increase in consumer spending

• The explosion of gas and energy prices

• Unexpected changes in global trade

How does the speaker suggest the ECB should handle the reduction of the bond portfolio?

• By halting the reduction entirely

• By increasing the pace slightly

• By expediting the process significantly

• By maintaining the current pace

What is the speaker's stance on the ECB's reaction to increasing inflation?

• The ECB overreacted to inflation

• The ECB's projections were accurate

• The ECB ignored inflation completely

• The ECB's projections were affected by unforeseen events