ECB’s Kazaks says further rate rises may be needed if inflation stays high
ECB Governing Council member Mārtiņš Kazāks said rates may need to rise further if inflation remains well above target, according to Econostream’s interview, cited by Bloomberg. He cautioned that higher market yields are already tightening financing conditions and that policymakers must weigh opposing forces, including the risk that higher yields slow the economy, Forex Factory reported.
Bottom line — Kazāks is keeping further ECB tightening on the table, but says market-driven tightening argues for caution.
Go deeper 6
-
Kazāks described inflation as still far above the ECB’s target, Bloomberg reported.
-
Forex Factory relayed his view that higher yields are already adding tightening through markets.
-
He cautioned that higher yields could slow the economy, according to Forex Factory.
-
In an earlier interview with Econostream, Kazāks said rates might need to move into restrictive territory as energy costs spread to wages and prices.
-
Kazāks said the closing output gap could strengthen the pass-through of higher costs to wages and prices, Econostream reported.
-
He warned that rising food and fuel prices could make households and businesses more attentive to inflation, according to Econostream.