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German central bank governor on interest rates and inflation outlook

Joachim Negel, Germany’s central bank governor and ECB member, shares his latest thoughts on inflation and the potential for rate hikes in the euro area.

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Central bank board members told CNBC on Friday that the ECB will soon raise rates for the first time in more than a decade.

The ECB is in the limelight for its weaker attitude towards monetary policy than other central banks. However, as inflation continues to rise, expectations for higher interest rates have risen in recent months, with market players pointing out at least four rate hikes by the end of the year.

“We are on the right track,” Deutsche Bundesbank Governor Joachim Negel, one of the more hawkish members of the ECB, told CNBC Annette Weissbach.

“At a very important meeting in March, we decided to end the purchase of net worth. At the meeting in June, we decided to probably stop, depending on the data. This data is very here. It’s because he speaks convincing words. If you stop buying, you’ll soon see a top-notch rate hike. “

His comments indicate that the first rise in interest rates could come in July after the ECB discusses new economic forecasts released last month.

Mr Negel, who has been in employment since January, has warned of rising inflation since taking office and said interest rates are gaining momentum.

“I am very grateful that many colleagues on the board are now in my position here,” he said.

His comments follow the comments of Francois Billroy de Garhow, head of the Bank of France and a member of the ECB. Prices will gradually increase after summer..

Meanwhile, Italy’s Inhazio Bisco, the governor of the Bank of Italy and a prominent ECB, “jumped in”. Told CNBC The rate hike “may occur in the third quarter or the end of the year, but must be phased in,” he said.

Central banks are under great pressure to lower inflation as consumer prices rise more than ever and fuel the cost of living crisis.

The Federal Reserve Board raised the benchmark earlier this month Interest rate of 0.5% — The most aggressive hike of 22 years — the second of what is expected to be a series of hikes this year.

Inflation is currently at its highest level in the United States for the first time in 40 years. Consumer price index April increased by 8.3% from the same month of the previous year.

Meanwhile, the Bank of England has raised rates for the fourth time since it began in May. Normalization after Covid During December. Still, UK inflation remains very high, 9% high for the first time in 40 years on Wednesday.

However, the ECB has so far been more resistant to hiking, Price pressure will decrease Later this year.

Inflation in the euro area hit a record high for the sixth straight month in April. War in progress in the Ukrainian war Subsequent impacts on Europe’s energy supply weighed heavily on the region’s economy.

Headline inflation in 19 member regions reached 7.5% in April, surpassing the 7.4% reached in March.

German central bank governor on interest rates and inflation outlook

Source link German central bank governor on interest rates and inflation outlook

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