The chief economist of the ECB assures that the Rise in interest rates in the eurozone will be “gradual” and asserts that the “central stage” for standardization is a increase of 25 basis points in July and another in Septembera statement that mitigates the speculation that has been brewing in recent weeks that the ECB could raise interest rates more quickly, with increases of 50 basis points (half a percentage point).
In an interview with the Spanish Cinco Días, philip lane He indicated that “normalization has a natural tendency to move in units of 25 basis points, so increases of 25 basis points in the July and September meetings are the central scenario.” With interest rates (on deposits at the ECB) at -0.50%, this means that negative interest rates in the eurozone would only end in September.
Lane did not rule out that the pace of interest rate hikes could be faster, something that some governors have publicly defended, but “any discussion of rate hikes at another speed would have to show [no seio do Conselho do BCE] that it is better to move faster than this sequence of increases [de 25 pontos-base] in July and September.
The official confirmed that other hypotheses will be discussed in the Governing Council, including the possibility of an increase of at least 50 basis points as of July, which would take the ECB’s reference rates out of negative territory as of that month. [passando-as para zero]. “But the assessment that we are making at the moment, that in this way we will be able to move medium-term inflation expectations to our 2% target, recommends that we take a gradual approach,” Philip Lane stressed.
The ECB admits to raising interest rates faster than “gradually”
Last week, ECB President Christine Lagarde admitted that this single “gradual” approach to the pace of interest rate increases may not be enough to address inflation risks.
In a message where she also confirmed her intention to end negative interest rates in the third quarter, Lagarde stated that, in the ECB’s analysis, “there are clearly conditions in which gradualism may not be the appropriate strategy.”
“If we see that higher inflation threatens to anchor inflation expectations, or if there are indications that there may be a more permanent loss of economic potential, which limits the availability of resources, then the most correct policy would be the same as when there is a shock [de aumento na] demand”, that is, “monetary accommodation would have to be withdrawn quickly to eliminate the risk of a self-reinforcing spiral”.
“Recession is coming, but this could be good for the stock markets”, anticipates Allianz Global Investors
Source: Observadora
