ECB’s Vasle: Expected Interest Rates Lower Than Assumptions of Macro Projections
15 December 2023
By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Boštjan Vasle on Friday said that financial markets’ rate expectations undershot the technical assumptions behind the Eurosystem’s latest projections.
In a statement posted to the website of the Bank of Slovenia, which he heads, Vasle noted that market pricing had ‘fallen significantly’ since October. ‘Expected interest rates in the euro area are thus now lower than the interest rates assumed in the Eurosystem's macroeconomic forecasts’, he said.
The Governing Council considered that the current level of interest rates, given enough time, would ‘significantly contribute to the timely return of inflation to the target level’, he said.
‘Our further steps will depend on the current situation, that is, on economic and financial data, the movement of core inflation and the effectiveness of our measures’, he said. ‘Our decisions from meeting to meeting will continue to ensure that interest rate levels are sufficiently restrictive for as long as necessary to return inflation to our 2% target in time.’