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ECB policymakers weigh in on rates

Several top ECB policymakers have today voiced their thoughts on the future of the bank’s interest rate hikes, highlighting a variety of perspectives.

Yannis Stournaras, Chief of Greek Central Bank, hinted towards the nearing end of interest rate increases, stating, “It looks like we are very close to the end of interest rate rises.” While he doesn’t completely rule out another possible hike in September, he noted, “if there is one further – I see it difficult – in September, I believe we will stop there.”

However, Slovakia’s Central Bank Head Peter Kazimir suggested a less definitive stance, indicating a pause rather than an outright end to the cycle of rate increases. “Even if we were to take a break in September, it would be premature to consider it automatically…the end of the cycle,” Kazimir opined, further adding, “We are looking for the right place to stay for a large part of next year…And you will recognize that it has to be a place where we all must like it a little.”

Adding a nuanced perspective to the discourse, Francois Villeroy de Galhau, head of French Central Bank, expressed the ECB’s growing confidence that it will achieve its 2% inflation target by 2025, attributing this confidence to the effective transmission of rate hikes to the broader economy.

Villeroy emphasized the need for continued perseverance and pragmatism, stating, “Given the time needed for this full transmission, perseverance is now the prime key virtue. Pragmatism is second – decisions at our next meetings will be open and entirely data driven.”

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