ECB policymaker Klaas Knot said that the ECB needs to raise the policy rate at least two more times. Knot further argued that rates should stay put for a significant period of time following these increases.
“Headline inflation peak behind us but not sure if at peak of underlying inflation”, Knot noted adding that most of impact of ECB’s monetary tightening is still in the pipeline. “Next two ECB hikes should be 25 bps each”, he added.
These comments failed to help the Euro gather strength against its rivals. As of writing, EUR/USD was down 0.35% on a daily basis at 1.0712.
Additional Quotes
“I am totally open-minded on what happens with rates after the summer.”
“Market pricing of rate cuts is overly optimistic.”
Tags ECB interest rate hikes Klass Knot
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