ECB Governing Council member Robert Holzmann expressed concern over the inflationary environment, saying, “It’s not yet clear on inflation.” He stressed the need for continued rate hikes, suggesting that barring unforeseen circumstances, it could be a compelling case to “go ahead with rate hikes without pausing” in September.
Emphasizing the benefits of reaching peak rates quickly, Holzmann said, “The sooner we hit peak rates, the better. It also means we can eventually start reducing earlier.” He highlighted the market’s challenges in navigating sporadic “stop-and-go interest rate paths.”
Holzmann also acknowledged that the ECB is “a little behind” in its efforts to fight inflation. Asked about the possibility of continued rate hikes beyond September, he said the issue would come up again once interest rates hit the 4% mark.
On the subject of the economic health of the eurozone, Holzmann offered a cautious perspective. He was quick to dismiss fears of an imminent recession, although he acknowledged that the economy had fallen short of expectations. He characterized the current economic climate as one of stagnation, saying, “We are seeing a stagnant economy.”
