European Central Bank Chief Signals Further Hikes In Interest Rates

European Central Bank President Christine Lagarde said in a speech Thursday that it is not yet apparent that core inflation has peaked in the euro zone, signaling further hikes in interest rates in the continent.

“There is no clear evidence that underlying inflation has peaked,” Lagarde said Thursday in a speech in Hanover, Germany. “We have made clear that we still have ground to cover to bring interest rates to suffiECciently restrictive levels,” she added.

ECB likely to increase interest rates one more time

The central bank’s President spoke shortly after data showed inflation in the 20-nation euro zone slowed markedly last month, indicating that the toughest monetary-tightening campaign of the euro era can soon draw to a close. However, Lagarde said that there is no clear evidence of that yet, signaling more rate hikes in the coming months.

Core price pressures indicate that there’s probably still at least one more hike to come to ensure the 2% inflation target is reached. ECB Vice President Luis de Guindos said Wednesday that he “could not say that the victory is there so far.” Fellow rate-setter Madis Muller said more than one additional quarter-point rate move is likely.

“Considerable tightening is still in the pipeline.”

The European Central Bank’s chief said officials aren’t satisfied with the inflation outlook but that monetary policy is being transmitted “forcefully” to credit, with the action taken to date to still have a significant impact.

“These hikes are already feeding forcefully into bank lending conditions,” she said. “And we know that – having hiked so far and so fast – considerable tightening is still in the pipeline.”

In the United States Of America, FOMC will meet on 15th and 16th June to decide further interest rate hikes. Analysts are expecting one more hike in the interest rates in the current cycle.

Jai Pratap is a Crypto and Blockchain enthusiast with over three years of working experience with different major media houses. His current role at CoinGape includes creating high-impact web stories, cover breaking news, and write editorials. When not working, you’ll find him reading Russian literature or watching some Swedish movie.

The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.