ECB Governing Council member Martins Kazaks has suggested that a smaller rate hike of 25 basis points in May is possible, although a 50 basis point increase should not be dismissed entirely.
In an interview with Latvian news service Leta, Kazaks stated, “At some points, it’s only natural that the step size is reduced. For example, the increase could be not 50 basis points, but 25 basis points.”
Regarding the upcoming ECB Council meeting in May, Kazaks commented, “Should we move to a lower step already at the ECB Council meeting in May? I think there is every possibility for that, but a 50 basis point increase is not an option that can be ignored.”
Kazaks remains optimistic about the Eurozone’s economic outlook, pointing out that “the economy is still resilient, there will probably not be a recession in the Eurozone this year, the labor market remains strong, the pressure on wages is still very high and in some cases even increasing. Therefore, in my opinion, a rate increase is necessary.”
