FRANKFURT (Reuters) – The European Central Bank must keep interest rates at record highs to curb inflation, and traders betting on upcoming cuts in borrowing costs should be careful, ECB policymaker Joachim Nagel said in an interview published on Wednesday.
The Bundesbank president was joining a number of his colleagues in taking aim at market expectations for the ECB to start reversing its sharpest streak of rate hikes in March or April.
“We must initially remain at the current interest rate plateau so that monetary policy can fully develop its inflation-dampening effect,” Nagel said in an interview with German internet portal T-Online.
“I would say to everyone who is speculating on an imminent interest rate cut: be careful, some people have already miscalculated that.”
He conceded, however, that rates had very likely reached their peak.
(Reporting By Francesco Canepa; Editing by Andrew Heavens)
