Bundesbank President Joachim Nagel, in his remarks at a conference overnight, suggested an element of uncertainty regarding further ECB rate hikes, adding that will be “data driven.”
However, he expressed a belief that ECB is “close to that level we see as the terminal rate,” and added, “rates will stay where they are for a while.”
On a positive note, Nagel observed that inflation is on the decline, describing it as “a greedy beast” that ECB is actively working to tame. He expressed confidence in ECB’s strategy, projecting that it is on track to bring inflation closer to its 2% target over the next 12-15 months.
Despite this optimistic view on inflation, Nagel cautioned that there are still risk factors that could spur another round of inflation. He acknowledged the uncertainty in predicting future economic developments, concluding with “So nobody knows” what’s next.
