ECB’s Centeno: I Support All the ECB’s Rate Hikes So Far

22 December 2022

By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Mario Centeno on Thursday said that he agreed with every ECB rate hike to date in the current hiking cycle and that where the hikes were headed would become clearer once inflation started to subside.

In an interview with Portuguese business daily Jornal de Negócios, Centeno, who heads Banco de Portugal, said, ‘I support all the rate increases that have been made by the ECB so far.’ His position, he said, was ‘fully aligned with the decision that was made.’

As for the probable duration of the cycle, Centeno said merely that more hikes had to come and that greater monetary policy predictability, ‘which is highly desirable, will become more obvious to everyone once inflation starts to come down.’

This would be ‘much sooner’ than 2025, he said.

Interest rates in the euro area ‘remain historically low’ and ‘are not expected to reach the levels they have already reached in the US’, he said.

Inflationary pressures had become more generalised, affecting ‘[a]lmost all the goods in the basket’, he said.

A European recession was ‘still avoidable’, not being the baseline scenario of the ECB, OECD or European Commission, he said.

‘My point is: we can avoid this recession’, he said. ‘Today, with the instruments we have and with what we know about the evolution of the economy, this is still possible.’