Schnabel Talks About Monetary Policy in an Uncertain Environment
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On November 5, 2026, Isabel Schnabel, a member of the Executive Board of the European Central Bank, delivered a speech entitled “Navigating Stormy Waters—Reflections on Monetary Policy” at the ECB’s Monetary Policy Conference. She reviewed the inflation shocks of recent years and shared her thoughts on conducting monetary policy operations in an uncertain environment. Schnabel advocated avoiding excessive commitments, retaining room for policy adjustments, and using key policy interest rates as the primary tool. She stated that asset purchases should distinguish between market stabilization and the calibration of the monetary policy stance; regarding instruments, the Transmission Protection Instrument (TPI) can be used to address disorderly market dynamics that threaten monetary policy transmission. She also pointed out that the policy response depends mainly on the impact of a shock on the expected path of inflation, rather than on the nature of the shock itself.
AI-written from reports · updated 3 hours ago
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- European Central BankIsabel Schnabel: Navigating Stormy Waters—Reflections on Monetary Policy
In a speech at the ECB money market conference, Isabel Schnabel reviewed the inflation shocks of recent years and shared her thoughts on conducting monetary policy in an uncertain environment. She advocates avoiding overcommitment and preserving room for adjustment, while using key policy rates as the primary tool; asset purchases should distinguish between market stabilisation and calibrating the policy stance, and the TPI can be used to address disorderly market dynamics that threaten monetary policy transmission. She also noted that the policy response depends mainly on the impact of the shock on the expected inflation path, rather than on the nature of the shock itself.
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