ECB’s Kazāks: ‘We Still Have Quite Some Ground to Cover’
9 May 2023
By David Barwick – FRANKFURT (Econostream) – The European Central needs to continue tightening monetary policy in the coming months, Governing Council member Mārtiņš Kazāks said Tuesday.
In an interview with Bloomberg, Kazāks, who heads Latvijas Banka, said, ‘I don’t think it is that clear yet’ that the ECB will hit its terminal rate in July. ‘We still have quite some ground to cover and further rate increases will be necessary to tame inflation.’
Conjecture about an initial easing move next spring was ‘significantly premature’, he was quoted as saying.
The risks of tightening too little still dominated, he said. ‘Persistently high inflation is a bigger problem for society than a relatively short and shallow recession’, he said. ‘Failing to contain inflation would be a failure because then the policy response in the second go would then need to be much tighter.’