ECB’s Nagel: Must Quickly End the Still Very Expansionary Monetary Policy Stance
26 July 2022
By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Joachim Nagel on Tuesday urged a quick end to what he called a ‘still very expansionary’ ECB monetary policy stance.
In an interview with German news agency DPA, Nagel, who heads the German Bundesbank, said that monetary authorities ‘can and must do everything we can to prevent the current high inflation from becoming entrenched.’
‘This requires clear communication’, he continued. ‘And words must be followed by deeds: The still very expansionary orientation of monetary policy must be ended quickly, and the key interest rate hike that has now been decided is a first, important step in this direction. Otherwise we run the risk of having to raise interest rates all the more abruptly and sharply at a later date. The history of monetary policy also teaches us this.’