ECB’s Makhlouf Says Two Further Rate Hikes Likely

26 May 2023

By Xavier D’Arcy – FRANKFURT (Econostream) – European Central Bank Governing Council member Gabriel Makhlouf said on Friday that two further ECB rate hikes in June and July were likely.

In an interview with Reuters, Makhkouf, who heads the Central Bank of Ireland, said, ‘My gut feeling at the moment from everything I have seen is that we'll be moving rates again at our June meeting and it wouldn't surprise me if we're moving again at our July meeting’.

‘Another two steps seem to be my lead options’, he said. ‘I'm very, very relaxed about what markets are pricing at the moment, partly because their pricing for the next couple of meetings is not inconsistent with where I am’, he added. ‘As for what they price in 2024, that's just a punt, as far as I'm concerned.’

He was confident that the ECB could ‘definitely achieve our target without a recession. The underlying dynamics do appear to be pretty strong, and the labour market is in robust health’.

‘So far we haven't seen wage settlements on the pan-euro area level that raises concerns, even if in some countries there have been wage settlement that are going to be problematic for those countries’, he said.