The European Central Bank is likely to continue raising interest rates at least two more times, according to Governing Council member Madis Muller.
(Bloomberg) — The European Central Bank is likely to continue raising interest rates at least two more times, according to Governing Council member Madis Muller.
“Looking at how fast inflation is right now, I think it’s very likely that we’re in for more than one more 0.25% interest rate hike,” the Estonian central bank chief told reporters in Tallinn on Wednesday. “It also seems to me that it’s probably too optimistic to expect interest rates to drop early next year.”
Muller’s comments chime with fellow rate-setters, economists and investors who predict the ECB will continue its 375 basis-point tightening cycle with two quarter-point steps in June and July. Some policymakers have said another move in September may also be needed.
Speaking the day before euro-zone data are set to show that underlying inflation, which strips out volatile elements like energy and food, remained elevated at 5.5%, Muller lamented that the gauge “unfortunately shows no signs of slowing yet.”
He also warned that “European governments continue to give the economy and price increases an extra boost with their fiscal policy, which doesn’t make the central bank’s task any easier.”
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