Will the ECB slow down rate hikes?
2022.12.02 05:55
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Will the ECB slow down rate hikes?
Budrigannews.com – European markets are uncertain this Friday due to the expected applications of representatives of the Central Bank and forecasts. In November, GDP in the eurozone grew by 10.6, which is much less than the previous 10.6, and compared with the consensus – by 10.4.
Investors are pleased with this data, which confirms the ECB’s forecasts of adopting a strategy similar to the strategy of the Federal Reserve System, as well as a slowdown in the rate of interest rate growth at the next meeting of this month.
However, not all experts agree with this. Economists at AXA Hugo Le Damani and Francoise Cabot believe that in annual terms, inflation remains at level 5, although it is too early to predict significant changes. We believe that the factors of the season slightly distort it due to insufficient information.
According to analysts, the ECB data is unlikely to change its position at the December meeting. In fact, the ECB president stressed on Friday that “three uncertainties complicate credit policy.” “Central banks need to work on returning the consumer goods price index to the target indicators,” the agency said, “including the development of the world market and the consumer goods price index.”
In his comments transmitted to RIA Novosti, Lagarde said: “What we, the heads of the Central Bank, need to do is to pursue a monetary policy that meets expectations…” We must signal to the public, observers, commentators that inflation will return to our medium-term targets in a timely manner under any scenarios.” “The inflation data will probably be enough for the ECB’s “blue” advisers to gain an advantage in December.”
Although yesterday’s data did not give a convincing idea of a decrease in inflation caused by high fluctuations in electricity prices. But at present, it is likely that inflation has reached the highest level of the eurozone.
As a result, Commerzbank informs Financial Storm that the ECB is likely to continue to work in sync with the Fed and reduce the rate of interest rate growth. Mauro Valle, head of the fixed income group Generali Investment Partners, explains that if the economy grows, it will clearly be weaker and inflation will be high.
The expert added that the ECB will most likely continue to increase rates over the coming months, and then inflation will fall, but it will have to be stopped in the first months of this year.
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