German Bundesbank chairman Joachim Nagel thinks the European Central Bank (ECB) should raise interest rates by the end of this year if inflation does not “improve significantly”. That is what Nagel, who took office at the beginning of this year, said in the German newspaper Die Zeit. Nagel expects inflation in Germany to exceed 4 percent on average over the entire year. That is more than the Bundesbank forecast in December.
Nagel’s statements correspond to those of Klaas Knot, the president of De Nederlandsche Bank. Knot said last weekend that he foresees an interest rate hike by the ECB by the end of the year. Moreover, Nagel indicates that, like his predecessor Jens Weidmann, he is a hawk, so someone who wants a strict policy from the central bank that only has a limited influence on the economy. Knot is also a hawk within the ECB.
Until recently, the ECB maintained that there would be no room for an interest rate hike this year because inflation would remain high for a while. When inflation turned out to have unexpectedly increased in January, ECB President Christine Lagarde for the first time no longer ruled out a rate hike in 2022.
Bundesbank chairman also thinks of interest rate hike at the end of the year
Source link Bundesbank chairman also thinks of interest rate hike at the end of the year