European Central Bank Vice President Luis de Guindos said underlying price pressures will be an important factor for future monetary-policy decisions.
(Bloomberg) — European Central Bank Vice President Luis de Guindos said underlying price pressures will be an important factor for future monetary-policy decisions.
While headline inflation could slow to below 6% from 8.5% now by mid-2023, the measure that strips out volatile items like food and energy could may more stable, Guindos told an event Friday in Madrid.
“In March we’ll have some projections, we’ll have more data on the evolution of underlying inflation,” Guindos said at CUNEF University. “Underlying inflation is very, very important.”
Persistent euro-zone price pressures have cemented expectations for another 50 basis-point hike in interest rates when the ECB Governing Council meets in less than two weeks, with more action likely to follow. Stronger-than-expected numbers this week prompted investors to bet that the ECB’s deposit rate — currently 2.5% — will reach a peak of 4%.
Guindos said inflation will have to clearly converge back to the 2% target before officials could halt their tightening campaign. He declined to estimate how far rates will have to rise.
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