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• “We are on the right path,” Joachim Nagel, one of the ECB’s hawkish members, said
• Nagel’s comments indicate ECB could raise its interest rate as soon as July
European Central Bank will soon increase the interest rates for the first time in more than a decade after maintaining a less aggressive stance on monetary policy compared to other central banks.
"I believe we will see rather soon the first-rate hikes,” Joachim Nagel, president of Germany’s Bundesbank, a member of the ECB’s governing council, told CNBC on Friday.
In recent months expectations of a rate rise have grown amid constant increases in inflation, with market players now seeking at least four rate hikes before the end of 2022.
“In our very important meeting in March, we decided to end our net asset purchases, and in the June meeting, dependent on data, we will decide to stop maybe — and I say this because this data are speaking a very convincing language here — that we stop our purchases,” he told CNBC.
The comments indicate that the first-rate hike could come as soon as July, once the ECB publishes new economic forecasts the next month.
Nagel, who has been the president of Germany’s central bank since January, said he has been warning about higher inflationary pressure since taking on the role and is now seeing more momentum toward curbing it by increasing the interest rates.
“We are on the right path,” Nagel said.
Picture Credit: Reuters
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