ECB Governing Council member Martins Kazaks said in a Bloomberg interview, that it’s possible to hike interest rate in July. Meanwhile, QE could end at the end of June but the policy members will have to discuss it with new economic forecasts on hand.
“A rate increase in July is possible, and I have no reason to disagree with what markets are pricing for the second half of the year,” he said. “We are on a solid path of policy normalization” where “we step-by-step gradually get to zero and then above”.
“Gradual doesn’t mean slow,” added Kazaks. “It doesn’t mean being consciously behind the curve. No, it just means checking if taken policy measures are appropriate.”
“We haven’t seen any major elements of stress in financial markets, which makes me think that ending QE early in the third quarter is possible and appropriate,” Kazaks said. “Whether it could already happen at the end of June, we’ll have to discuss when we get new forecasts.”
