Speaking in Ljubljana, Slovenia, Christine Lagarde stressed that the key interest rate hike would come as soon as the mass bond market (QE) program ended: “The first interest rate hike will take place sometime after the end of the bond market program. We have not set “Even at the exact time. Deliberately. But I want to be clear. There will be a period of only a few weeks.”
There is no room for misunderstanding for Carsten Bjeski, chief economist at ING Bank.
Immediate action is required
German Federal Reserve Chairman Joachim Nagel agrees with this assessment, saying yesterday that high inflation is weakening household purchasing power and, combined with the uncertainty surrounding the war in Ukraine, is leading to a loss of confidence. According to the head of the Bundesbank, immediate action is needed because otherwise rising prices and wages may further strengthen the upward trends in inflation.
The war in Ukraine and the lockdowns in China have exacerbated supply chain problems, while energy prices are breaking new records. As a result, inflation in the eurozone recently reached 7.5% with the economy remaining stagnant. According to ING chief economist Carsten Bjeski, “we have a stagnant economy and high inflation right now. In other words, stagnant inflation. And that’s the biggest challenge for the ECB.”
Misa Earhard + EBU Edited by: Stefanos Georgakopoulos
Source: Deutsche Welle
Source: Capital
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