The European Central Bank may be approaching the final leg of its historic cycle of interest-rate increases, according to Governing Council member Joachim Nagel.
(Bloomberg) — The European Central Bank may be approaching the final leg of its historic cycle of interest-rate increases, according to Governing Council member Joachim Nagel.
While hikes in borrowing costs aren’t over and core inflation still needs to be tamed, the Bundesbank chief said Wednesday that he’s very satisfied with the ECB’s monetary policy.
“We’re coming to the home stretch in the sense that we are reaching the area in monetary policy that’s considered restrictive,” he told Deutschlandfunk radio.
“I’m confident monetary policy is showing its effect.”
Nagel’s remarks chime with the view of most economists, who reckon the ECB will raise its deposit rate twice more, in June and July, leaving it at a peak of 3.75%.
The Federal Reserve has already opened the door to pause in its cycle, though began tightening before officials in Frankfurt.
Greek Central Bank chief Yannis Stournaras said earlier Wednesday that ECB rate increases will end in 2023.
Latvia’s Martins Kazaks has warned that hikes may persist beyond July.
Nagel described last week’s decision to slow the pace of tightening while announcing a halt in reinvestments under the Asset Purchase Program as the right move, though underlined that the job isn’t complete.
“We’re not yet done with rate hiking,” he said.
“There’s still work to be done. We need to stay stubborn.”
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