With rates at zero, the ECB is stimulating the economy and remains far from the neutral rate, which economists estimate at around 1.5%.
Villeroy said the neutral rate should be reached before the end of the year, while Kazaks said it would come in the first quarter of next year.
“In my opinion, we could get there before the end of the year, after another significant step in September,” Villeroy said.
Schnabel also warned that inflation expectations now risk exceeding the ECB’s medium-term target of 2%, or “de-anchoring”, and polls suggest the public has started to lose confidence in central banks.
The rate hikes come despite euro zone growth slowing and the risk of recession looming over it.
But the recession will be due above all to rising energy costs, against which the currency is powerless.
In addition, many say the slowdown is unlikely to weigh on price growth enough to bring inflation back on target without monetary policy tightening.
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