Piero Cipollone, a member of the European Central Bank's Executive Board, has emphasized the need for a carefully calibrated approach to monetary policy, warning against excessive tightening that could harm economic growth. In an interview published on Monday with Italian media outlet ilsussidiario, the official stated that policy actions require precise adjustment, particularly when addressing supply-side shocks.

Cipollone explained that in scenarios such as an oil crisis, raising interest rates to stabilize inflation near the target could inadvertently suppress economic growth already under strain from negative impacts. His comments come as the eurozone economy has demonstrated unexpected resilience amid geopolitical tensions, with second-quarter growth reaching 0.4%, surpassing expectations, while sentiment indicators have turned increasingly optimistic in recent months.

Meanwhile, inflation remains significantly above the ECB's 2% objective, currently standing at 2.9%. Policymakers are deliberating whether to implement another rate hike next month, following the initial 25-basis-point increase in June. The official noted that despite a slowdown in European economic expansion, the region's resilience has proven stronger than anticipated, with inflation trends aligning with the baseline scenario outlined in the latest June projections and remaining far from adverse or severe outcomes.

He further emphasized that there are currently no indications pointing toward a stagflationary environment, reinforcing confidence in the current economic trajectory.