Please try another search
Economy 51 minutes ago (2022-08-30 12:46pm EST)
© Reuters. FILE PHOTO: Bundesbank President Joachim Nagel speaks during a press conference after the G7 summit in Koenigswinter, near Bonn, Germany, on May 20, 2022. Reuters/Benjamin Westhoff 
(Reuters) – The European Central Bank must act decisively to curb inflation, Bundesbank President Joachim Nagel said on Tuesday, with policy They all called for another big rate hike next week.
The ECB raised its deposit rate by 50bps to zero last month, and the only real question about September seems to be whether the bank should raise rates by 50bps or 75bps .
While Nagel did not comment on the exact magnitude of the rate hike, he advocated decisive action and emphasized the benefits of raising rates earlier.
“Monetary policy must respond decisively to maintain the credibility of the inflation target,” Nagel said. “Data from multiple countries show that raising interest rates earlier or earlier reduces the risk of a painful recession.”
Many policymakers have said that 75 basis points should be on the table, while others, including board member Isabelle Schnabel and Bank of France governor François Villeroy de Garau, have called for a “strong” or “significant” action.
“In my view, a larger rate hike would reduce the risk of runaway inflation expectations,” Nagel said.
Euro zone inflation is expected to hit 9% this month and could rise further above 10% as a surge in energy prices raises the risk of a higher reading.
Nagel also countered the argument that the growing likelihood of a recession in the coming months due to high energy prices should slow down the ECB’s pace.
“We shouldn’t put off further rate hikes because of fears of a possible recession,” he said. “Inflation will not return to the central bank’s inflation target on its own.”
But he said longer-term inflation expectations still appear to be anchored.
related articles
![Chorus backing big ECB rate hike grows]()
Big cities in China, from Dalian to Shenzhen , are stepping up efforts to prevent and control the new crown epidemic Reuters – August 30, 2022
BEIJING/SHENZHEN, CHINA (Reuters) – Several of China’s largest corporate cities are located in Tougher COVID-19 restrictions were imposed on Tuesday, further restricting the movement of tens of millions of people and sparking…
The calls for a substantial rate hike by the European Central Bank are getting louder Reuters – August 30, 2022
BY BALAZS KORANYI ALPBACH, AUSTRIA (Reuters) – European Central Bank policymakers have called for decisive and rapid interest rate hikes on Tuesday to tackle soaring inflation,…
Comic of the Week: A Chill Explosion in the Euro and Pound from the East by Investing.com – August 30, 2022
By Geoffrey Smith Investing.com — Yes How low can the euro and pound go? Both currencies have hit multi-year lows over the past few weeks, and for good reason. The explosion of …
