The European Central Bank (ECB) should continue to raise rates even if long-term inflation expectations remain anchored, ECB Governing Council member Ignazio Visco said on Friday, as reported by Reuters.
Key points
“The approach to policy tightening will be defined on a meeting-by-meeting basis based on the data.”
“The medium-term economic outlook for the euro area is important to set a more appropriate final level, proceeding gradually.”
“There are no obvious reasons at present to tie one’s hands with the idea of exceptionally high rate hikes.”
“Rate hikes could have the biggest impact on inflation once the economy has already slowed significantly.”
“The significant worsening of the economic outlook is cause for concern.”
“Impossible to fully offset the impact of the energy crisis on wages and benefits.”
“Fiscal policy can redistribute the impact, but increasing debt would unfairly shift the burden onto future generations.”
market reaction
These comments do not seem to have a notable impact on the performance of the shared currency against its rivals. At the time of writing, the EUR/USD pair lost 0.2% on the day, trading at 0.9795.
Source: Fx Street
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