The European Central Bank has completed the majority of the increases in borrowing costs required to tame inflation, according to Governing Council member Gediminas Simkus.
(Bloomberg) — The European Central Bank has completed the majority of the increases in borrowing costs required to tame inflation, according to Governing Council member Gediminas Simkus.
While underlying price pressures, which hit another record last month, remain an issue, the most aggressive bout of monetary-tightening in ECB history may be nearing its end, the Lithuanian central bank chief said Monday.
“Core inflation is sticky,” Simkus said in Vilnius. “I believe we’ve covered the larger part of the path of the interest-rate increases, but we’re not there yet.”
ECB officials are pondering how high to push rates as the recent global banking turmoil threatens to weigh on lending and economic growth. Adding to their headache is Sunday’s decision by OPEC+ to cut oil output — a move that risks fanning consumer prices. Other risks — such as property investment funds — are emerging, too.
Simkus isn’t the only policymaker to say the rate cycle may soon be over. Bank of France Governor Francois Villeroy de Galhau said Friday that “we have completed most of our rate-hiking journey,” though “may possibly still have a little way to go.”
In comments published Sunday in the Protothema newspaper, Greece’s Yannis Stournaras agreed, though declined to speculate on the outcome of the next policy meeting, in May.
“Especially after the latest events I feel now that we are close to the end,” he said. “I can’t say we’re at the end, that it’s over, but we’re definitely close to the end.”
–With assistance from Sotiris Nikas.
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