ECB Governing Council member Olli Rehn said, “We are seeing signs of second-round effects. It’s important that we send a signal that these higher inflation expectations we are currently witnessing will not become entrenched.”
It’s “reasonable that we will rather sooner, in my view in July, start raising rates in line with our normalization of monetary policy. And would expect that when autumn comes, we would be at zero,” he said.
Rehn also noted that the Ukraine war is hampering Eurozone’s economic recovery from the pandemic. “We are seeing some stagflation tendencies,” Rehn said. The Governing Council should ensure that monetary decisions don’t derail economic growth, but at the same time avoid inflation becoming entrenched, Rehn said.
