The European Central Bank can afford to look through a period of below-target inflation, according to Governing Council member Joachim Nagel. His comments suggest policymakers are willing to tolerate temporary price weakness while maintaining flexibility to adjust course if economic conditions shift.

Nagel emphasized that the central bank must remain ready to act in either direction if needed, highlighting the ECB's balanced approach to monetary policy. This stance comes as inflation across the eurozone has moderated from last year's peaks, giving policymakers more room to assess the economic outlook before making further decisions.

The ECB's tolerance for below-target inflation reflects growing confidence that price pressures are easing, though officials remain vigilant about potential upside risks. Nagel's remarks align with recent signals from other ECB policymakers who have suggested that interest rates may have reached their peak in this cycle, pending further economic data.

Quick Fact: The ECB's inflation target is 2% over the medium term.