The European Central Bank (ECB) is preparing to implement three new interest rate hikes in the coming months. The president of the ECB, Christine Lagarde, has left open the possibility of a tightening of rates, which could begin in October.
The European Central Bank (ECB) is considering three new interest rate hikes, according to expansion.com. Following the summit held in Berlin, market expectations suggest that the next hike could occur as soon as the meeting in October.
In this context, the president of the ECB, Christine Lagarde, has indicated that the next increase will raise rates above 2.5%, marking the entry into restrictive territory. This is because the neutral rate is between 2% and 2.5% in the eurozone, meaning that financing conditions will tighten significantly.
The ECB aims to cool economic activity as part of its strategy to control inflation, which has been driven by various factors, including the war in the Middle East. Lagarde emphasized that, although the current situation allows for greater-than-expected growth, the tightening of monetary policy could have adverse effects on the European economy.
The rate hikes already implemented have been considered by Lagarde as "an obvious decision." However, future increases may require stronger justifications due to the complexity of operating in an inflationary context and the potential repercussions on the well-being of European families and businesses.
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