ECB Policy Maker: "Eurozone Rate Hike Possible... Uncertainty Over Peak Interest Rate"

Oesterreichische Nationalbank Governor and European Central Bank (ECB) Monetary Policy Committee member Berthold Holzmann stated that the possibility of further interest rate hikes cannot be ruled out as inflation in the Eurozone continues to rise.

[Image source=Reuters Yonhap News]

Known as a hawk (favoring monetary tightening) within the ECB, Governor Holzmann attended a Bloomberg TV event in Vienna, Austria, on the 26th (local time), where he mentioned factors hindering the decline of consumer prices in the Eurozone, such as wage negotiations and rising oil prices, saying, "There are shocking factors that make (rate hikes) necessary."

He added that it is unclear whether the key interest rate has been raised to its peak, emphasizing, "Inflation must be controlled, and that is why we are here."

The market focused on Holzmann's remarks amid growing expectations that the ECB will maintain a tighter monetary policy for longer than anticipated to slow inflation.

Some ECB officials argue that since interest rates have already reached their peak while struggling to sustain economic expansion in the 20 Eurozone countries, no further hikes should be made. On the other hand, some counter that it is premature to end the tightening monetary policy as price risks, including oil prices, persist.

In this regard, ECB President Christine Lagarde emphasized on the 25th that although the economy is challenging, high interest rates will be maintained as long as necessary to slow inflation.

Bloomberg reported that economic indicators for September, to be released on the 28th and 29th by Germany and Eurostat, the statistical office of the European Union, are expected to show whether the ECB's tightening policy has been effective so far.

This content was produced with the assistance of AI translation services.