More from ECB Knot: Would prefer a tolerance band around target rate

<ul><li>Italian spreads have increased recently because of budget issues</li><li>Unemployment cost of disinflation is benign compared to previous policy tightening cycles</li><li>Would prefer a tolerance band around target rather than a strict point target for inflation</li><li>ECB stands ready to respond to new upside risks should they materialize</li></ul><p>Meanwhile ECB's Vasle adds:</p><ul><li>Very close to rate peak</li><li>Impossible to tell today if we are done or more could be needed</li></ul><p>ECBs Kazimir:</p><ul><li>For the moment, we are fine with the current level of rates</li></ul><p>ECB chatter is that of hope that economy is slowing, inflation will slow further and a soft landing will be forthcoming.</p>

This article was written by Greg Michalowski at www.forexlive.com.