Are the ECB's targets off?

It's constantly chasing a 2% inflation rate...

Are the ECB's targets off?

(Image: Pixabay)

Nearly every policy decision made by the ECB is made to serve its mandated target of hitting a 2% inflation rate across the eurozone.

However, the man in charge of setting interest rates for the bloc, Ewald Nowotny, has asked whether this goal may need to be reassessed.

Speaking at a conference of ECB policymakers, he questioned whether there may, "be an easing or broadening of the inflation goal in the sense of setting a range instead of a clear-cut target."

The zone's annual inflation was 1.4% in May 2017, that was down from 1.9% in April 2017.

The US Central Bank, the Federal Reserve, increased key interest rates by 0.25% to between 1% and 1.25% last night. That was the second increase of this size this year and the second of three planned such increases this year.

ECB chiefs have been under pressure to move away from its current low-interest rates as the bloc's recovery shows signs of sticking.

Its decision makers have continuously stated that it will stick to its current expansive policies, including the imposition of historically-low interest rates and its bond-buying programme throughout 2017.