ECB’s Kazāks: July Probably Too Soon for Rates Lift-Off

7 February 2022

By David Barwick – FRANKFURT (Econostream) – The European Central Bank is unlikely to be ready to start hiking interest rates as soon as July, ECB Governing Council member Mārtiņš Kazāks said Monday.

In an interview with Reuters, Kazāks, who is Governor of Latvijas Banka, said, ‘July would imply an extremely and unlikely quick pace of tapering. But overall, at the current juncture, naming a specific month would be much premature.’

‘If we see that inflation remains high and the labour market remains strong or strengthens further, if we see that the economy keeps going, the direction is clear: we may act sooner than we assumed in the past’, he was quoted as saying.

‘With the economy recovering, inflation at this level and increased risk of persistency of inflation, new net asset purchases become less necessary’, he observed.

Reuters reported that Kazāks expressed a preference for setting out the pace of tapering ahead of time rather than making repeated decisions that risked causing ‘recurrent cliff effects’.