#加息风险

European Central Bank’s De Marco: The ECB should not rush into further rate hikes

[European Central Bank’s De Marco: The ECB should not rush into further rate hikes] Golden Finance reported on July 1 that De Marco, a member of the European Central Bank’s Governing Council, said that given the unexpectedly rapid drop in oil prices, the ECB should not rush to further rate hikes. The ECB raised rates in June, and its own forecasts were based on further tightening of policy; however, in the weeks since, energy costs have fallen sharply, strengthening the case for postponing further hikes. De Marco said that the decline in energy costs should quickly ease inflation expectations and curb wage-growth demands. This statement further strengthens the case for the ECB to keep interest rates unchanged this month. Previously, multiple policymakers had called for patience and for a pause in taking further action. De Marco said that there is only a reason to raise rates early now if there are second-round inflation effects, inflation expectations become unanchored, or wage-upward demands strengthen. “We currently do not see these conditions emerging, so given that oil prices have now fallen back to roughly the levels seen before the conflict broke out, we can fully wait for the next round of forecast results rather than hastily raising rates again and risking unnecessary damage to economic growth.” He also said it is worth noting that even in the latest forecasts’ more moderate scenario, assumptions of further tightening are still included. Therefore, if future data validate this scenario, the ECB may still need to raise rates further. (Jin Ten)