ECB interest rates are on a mountain, not a peak, says Bundesbank president

The European Central Bank (ECB) should be cautious about future monetary policy measures, Bundesbank President and ECB Council member Joachim Nagel said on Monday, comparing the trajectory of interest rates to a mountain quite high. more than one peak.

The ECB cut its benchmark interest rate from last week’s record low but gave no clear indication of further cuts as the outlook for inflation turned murky following some solid data on wages and inflation.

“We must remain cautious,” Nagel said in a speech. “This is because uncertainty about future economic and price trends remains high.”

He went on to compare the current situation to a mountain.

“I don’t see us on a peak where things will inevitably go downhill. Instead, I see us on a mountain where we have yet to find the sweet spot for further descent.”

Bank of England chief economist Huw Pill popularized mountain comparisons last year when he said interest rates would likely have a similar profile to Cape Town’s Table Mountain – with a high, flat top – – instead of the Swiss Matterhorn, which has a much higher peak. and then it goes down quickly.

Source: Terra

Rose

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