FRANKFURT (Reuters) – Financial investors may be underestimating the persistence of inflation in the euro zone, said Isabel Schnabel, a member of the governing council of the European Central Bank (ECB).
“There is a risk that inflation will turn out to be more persistent than what is currently assessed by the financial markets,” she said in an interview published Friday by the Bloomberg agency.
These remarks, suggesting new monetary tightening, raised expectations for the evolution of rates in the euro zone, the peak in the cost of credit having fallen on Friday to around 3.85% by the end of the summer. , down from around 3.70% on Thursday.
Isabel Schnabel, considered the most influential of the ECB members among the “hawks”, those in favor of a more restrictive policy, also said that the central bank may have to “act more forcefully” if it finds that the impact of its tightening on the economy is weaker than in the past.
The ECB raised rates by 50 basis points earlier this month and hinted that a hike of the same magnitude would take place next month at the end of its March 16 meeting. The decisions for the future are open but several officials of the institution expect a further rate hike in May.
(Report Francesco Canepa; French version Claude Chendjou, edited by Kate Entringer)
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