Bundesbank President Joachim Nagel told Boersen-Zeitung, “it would be dangerous to think that we are already through and that the inflation problem is over.” In particular, core CPI at 5.2% shows that “inflation is eating its way through the economy and is becoming more widespread.”
On interest rate, Nagel said, “From my current perspective, further significant interest rate increases are needed… In my opinion, we must also raise interest rates in order to achieve the necessary braking effect, with which we can bring inflation back to 2% quickly and sustainably.”
Regarding German economy, Nagel said, “this year, the economy could roughly stagnate instead of falling into recession,” while “inflation could now “possibly land somewhere between 6% and 7%”.
