ECB To Continue To Take ‘Forceful Action’ Beyond March, Makhlouf Says
14 February 2023
By Xavier D’Arcy – BERLIN (Germany) – European Central Bank Governing Council member Gabriel Makhlouf said on Tuesday that he expected rate hikes to continue beyond the March meeting and that he was in favour of taking forceful action against inflation.
Speaking on a panel on financial stability at the Jacques Delors Centre in Berlin, Makhlouf, the governor of the Central Bank of Ireland, said, ‘You should expect us - certainly I’m open to - to continue to take forceful action to see monetary policy ultimately deliver on our target.’
‘We’ve announced our intention that there will be a further increase in our policy rates at the March meeting; I expect us to continue to increase rates after our March meeting’, he said.
As ‘we are quite far’ from the ECB’s 2% inflation goal, ‘with the amount of uncertainty that exists in the macroeconomy right now, I’m not going to predict when we’re going to stop’, he said.
‘But we’re going to stop when we feel that the actions we’ve taken are going to deliver our 2% target on a sustainable basis’, he said.
Makhlouf admitted that he was concerned about the distributional effects of central banks’ policies. ‘One of the reasons I personally worry about the whole QE programme is I’m not sure we’ve completely, properly evaluated the costs and benefits of that’, he said.
He predicted that ‘central banks will look different at some point in the future’, saying that ‘you have to find new ways to demonstrate your capabilities and your worth’ and ‘as the world changes, you look at how to change.’