"The extreme uncertainty in which we find ourselves
inevitably implies, for the moment, a constant tightening of monetary policy to avoid the possibility of significant indirect effects in the Eurozone" but the "same uncertainty also suggests moving gradually and prudently, with rates indicators that continue to rise in a progressive but measured way, based on new data and its use in assessing the inflation outlook".
This was reiterated by the governor of the Bank of Italy, Ignazio Visco
, speaking at The Warwick Economics Summit 2023.
The governor of Bank of Italy does not believe that the euro area can experience lasting inflation such as that observed in many countries in the 1970s.
"I think it's very unlikely not only because of the substantial improvements in monetary policy but also and especially because of the many
structural changes that have taken place in our economies since then."
"Should signs of a wage-price spiral appear and inflation expectations become insufficiently anchored, further
significant monetary policy tightening would certainly be warranted," observed Visco, according to whom "it may be too
early to conclude that there is it is a tendency for relatively high inflation to become entrenched in wage bargaining" since, "inflation expectations appear to have remained well anchored and central banks are fully committed to achieving price stability".