ECB’s Makhlouf: Investors are wrong to bet on eurozone interest rates rising in June – FT
13.02.2022, 22:52

ECB’s Makhlouf: Investors are wrong to bet on eurozone interest rates rising in June – FT

“Investors are wrong to bet on eurozone interest rates rising in June, predicting policymakers will be careful to avoid ‘killing off the recovery’,” said Irish Central Bank Head and European Central Bank (ECB) member Gabriel Makhlouf per the Financial Times (FT).

Key quotes

‘The path to normalization’ of eurozone monetary policy had become clearer, after inflation hit a record high in the bloc while unemployment dropped to an all-time low.

The European Central Bank could stop its net bond purchases in June or a few months later, and would only raise rates after that.

The idea that we could hike interest rates in June looks very unrealistic to me.

I certainly think there’s a bit of difference between the calendar we’re working to and the one some market participants may have in mind.

I’m reasonably confident net asset purchases will end this year.

The question is what is the pace at which my foot sits on the accelerator, and am I talking about June or am I talking about the third quarter.

There are similarities between where we are today and 2011, but there are also differences and we need to make sure that our assessment is putting the current high headline numbers [of inflation] into a broader context.

Market reaction

Given the increased calls from the ECB policymakers to wait for the rate hikes, versus the hawkish Fedspeak, not to forget the Russia-linked risk-off mood, the EUR/USD pair remains pressured around 1.1345 during Monday’s Asian session.

Read: EUR/USD Price Analysis: Stays defensive above 1.1330 support confluence

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