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If the ECB intends to reduce inflation to 2%, it has not raised interest rates too much – Natixis

Many analysts argue that the ECB has raised interest rates too much. Natixis economists disagree with this idea.

There has not been an increase in unemployment nor has there been a situation of insufficient demand

Many analysts believe that the ECB has raised interest rates too much and that these increases have led to a stagnation of activity in the euro zone in 2023, and probably in 2024. We do not agree with this idea, since the unemployment rate in the Eurozone is at its lowest level; We continue to observe excess demand for goods and great procurement difficulties.

The ECB's restrictive monetary policy has not been enough to increase unemployment or create a deficit in aggregate demand for goods and services. For this reason, inflation will remain above the 2% targetand the ECB has not raised interest rates much.

Source: Fx Street

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