By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Mārtiņš Kazāks on Tuesday said the evidence currently favored further monetary tightening and that the ECB should be prepared to raise rates cautiously if needed.

“So far, it seems that some further tightening, from today’s perspective, would be warranted,” Kazāks, Governor of Latvijas Banka, told Bloomberg.

Kazāks said monetary policy should retain a “hawkish edge” given the risk that high inflation could lift inflation expectations.

“With inflation at 4 and above, of course there are risks that this starts to push up inflation expectations,” he said. “I don’t see that we should be afraid to move interest rates cautiously up if it is necessary.”

Kazāks said he wanted to see what the incoming data showed. He pointed to the stock market correction and higher government bond yields as two developments that could weigh on growth.

“Trade-offs are going to become more nuanced going forward, because at the end of the day we have to deliver on inflation, but also not at the cost of harming the economy too much,” he said.