“A drop in inflation for two consecutive months is good news. But it is not a reason to slow down the pace of interest rate hikes,” Kazimir said. “I’m convinced we need two more 50 basis point hikes.”
Although the eurozone central bank has been raising rates at the fastest pace in its history, it has so far failed to bring inflation anywhere near its 2% target.
“For me, the most important thing is the underlying inflation trend,” Kazimir said.
“We’re halfway there. If it were up to me, I’d go into the summer vacation with the tightening cycle complete. But don’t ask me today how far we’ll go with rates, and how long they’ll have to stay there to tame inflation.” as needed,” he added.
The ECB promised at its meeting on December 15 to make several more rate hikes, albeit by 50 basis points each, instead of the 75 basis points of September and October.
Analysts say that the ECB’s policy signals no longer seem to convince investors, whether it is trying to raise or lower interest rate expectations.
