European Central Bank Board Member Maček: Must Be Prepared for Further Interest Rate Hikes

BlockBeats News, September 2nd, according to the Financial Times, European Central Bank (ECB) board member Mersch stated that if inflation starts moving in the "wrong direction," the ECB will not shy away from further rate hikes. He mentioned that the current inflation rate in the Eurozone is hovering above 3%, and economic growth is slightly stronger than forecasted before the summer, which makes him "uneasy."

Mersch said that even if the deposit rate were to rise to 2.5%, monetary policy would not restrict economic activity, and a truly restrictive policy would only appear once rates exceed 2.75%. He expects the ECB to slightly raise the Eurozone's economic growth outlook for this year.

Mersch stated that it is currently unclear whether further rate hikes will be needed after next week's increase. The ECB should continue to adhere to a "meeting-by-meeting" decision-making strategy, avoiding providing forward guidance. He also pointed out that inflation expectations are currently in good shape, with no signs of wages triggering a second-round inflation effect, and relevant risks are under control.