Key facts
- ECB Governing Council member Peter Kazimir believes at least one more rate hike is necessary.
- Kazimir advocates for a rate hike in September, even if the economic outlook improves.
- He stressed the importance of preemptive action against inflation before it becomes costly to reverse.
- Kazimir indicated that further tightening might be required if price pressures intensify.
- He stated that the ECB should maintain market expectations by signaling its intentions clearly.
Peter Kazimir, a member of the European Central Bank's Governing Council and the Slovak central bank chief, has indicated that the ECB will likely need to implement at least one more interest rate hike to curb inflation. He expressed this view in an opinion piece, suggesting that such a move is warranted even if the economic outlook shows some improvement.
Kazimir, known for his hawkish stance, stated that significant economic data and geopolitical developments in the coming weeks would be necessary for him to reconsider advocating for a rate hike at the September meeting. He emphasized the ECB's mandate to act preemptively against inflation, warning that waiting until inflationary pressures are fully visible could be costly to reverse.
While the ECB held rates steady in its last meeting, it signaled a potential hike in September, partly due to rising oil and gas prices amid renewed Middle East conflict. Financial markets currently anticipate at least two further rate increases from the ECB, with the first fully priced in by October and a second by March. Kazimir noted that these market expectations are volatile and influenced by oil prices, which are currently fluctuating between the ECB's baseline and milder scenarios.