Interest rates set to rise 25 basis points in July and September, says ECB economist

European Central Bank (ECB) chief economist Philip Lane anticipated that the bank should raise interest rates by 25 basis points at its July and September monetary policy meetings, in an interview with the Spanish newspaper. Five days.

According to him, given the high uncertainty scenario, it is important to set the correct expectations.

With the ECB’s current plans, interest rates in the euro zone will come out of negative territory by the end of the third quarter, he said.

“We think this planning makes sense. What happens next depends on how inflation evolves,” Lane said.

As for the chance of increases greater than 25 basis points, the economist argued that the trend is for increases in this range because it works as a “reference rate” for the increase in the basic rate.

“Any discussion of other variations would have to justify a stronger move than this string of rallies in July and September. Debate will take place, but our current assessment of the situation calls for a gradual normalization,” he explained.

Lane also said the ECB was committed to avoiding financial fragmentation in the eurozone, at a time when the risk premium rises along with sovereign bond yields in the region.

“We are not going to ignore the risk of fragmentation, we know clearly that it was something very harmful in the past. We constantly monitor the risk of fragmentation and are committed to preventing it within the limits of our mandate.”

Source: CNN Brasil

You may also like