ECB’s Kažimír: No Reason to Slow Pace of Tightening; Need Two More 50BP Hikes
23 January 2023
By David Barwick – FRANKFURT (Econostream) – The European Central Bank has no grounds to decelerate the pace of its monetary policy tightening and should hike twice more by 50bp, Governing Council member Peter Kažimír said Monday.
In a statement entitled ‘We are halfway there, I see no reason to slow down’ issued on the website of the National Bank of Slovakia, which he heads, Kažimír said that ‘[t]he fall in inflation for two months in a row is positive news.’
‘But there is no reason to slow the pace of rate hikes’, he continued. ‘The encouraging November and December inflation figures include the "noise" of one-off compensatory measures by governments mitigating the effects of high energy prices.’
‘What is currently the most authoritative from my point of view is the trend of core inflation’, he wrote. ‘Its development confirms the need to continue on the path taken. I believe we need to "deliver" two more 50s.’
Although the economy of the region is proving hardier than anticipated one or two months ago, which is ‘very welcome’, he said, ‘on the other hand, it will probably have a milder dampening effect on the development of price growth.’
‘We’re halfway there’, though one need not ask now where the terminal rate will be and when exactly it will be reached, he said.