Panetta Says Outlook Remains Fragile as Inflation and Growth Risks Coexist

European Central Bank Executive Board member Fabio Panetta said the economic outlook remained fragile and that policymakers were still dealing with an uncertain environment, even as the United States and Iran were nearing a lasting peace agreement. According to Jin10, Panetta told a meeting in Rome that U.S.-Iran talks could push energy prices below the level the ECB forecast in June, but he said the outlook was still fragile. Panetta said upside risks to inflation and downside risks to growth continued to coexist. He said this required ongoing monitoring of geopolitical developments, energy markets, supply chains, wages, and inflation expectations. He added that monetary policy should avoid committing to a preset path. Panetta also said the current conflict was one of a series of increasingly frequent supply shocks, which could change how policymakers respond in the future to ensure inflation reaches the 2% target over the medium term.