ECBs Nagel: Considers further rate hikes as inflation risk persist

  • The ECB is not yet satisfied with the recent developments in inflation.
  • Further rate hikes remain a possibility as inflation risks are still on the upside.
  • Longer-term inflation expectations continue to be significantly above the 2% target.
  • Advocacy for a reduction in the ECB’s balance sheet, which could be accelerated.
  • It is currently too early to consider rate cuts.

Meanwhile, the euro zone CPI data today was weaker than expected.

  • Flash CPI 2.4% versus 2.7% expected and 2.9% last month
  • Core flash CPI 3.6% versus 3.9% expected and 4.2% last month

Yes inflation remains above target but progress is being made to the downside

This article was written by Greg Michalowski at Source