MNI BRIEF: Significant Hikes Needed After March - Buba's Nagel
Significant rate rises will be needed beyond the expected 50bps March hike, Joachim Nagel says
The ECB should follow March’s expected 50bps hike with more “significant” rate rises, Bundesbank president Joachim Nagel said in an interview with Boersen-Zeitung Tuesday, and expressed his opposition to any rate cuts in the foreseeable future, saying "we're still a long way from achieving price stability, our job isn't done yet".
"I would strongly advise interpreting the latest statement for what it is: a robust announcement that points beyond the March meeting," Nagel said. He believes that there will be discussions about falling interest rates in the future absolutely premature: “For the foreseeable future, interest rate cuts are not on my agenda at all.”
Germany’s economy could stagnate this year, Nagel said, citing the Bundesbank’s December projection of a 0.5% fall in GDP, while inflation is now more likely to average around 7% than 6%.