She downplays the risk of the ECB taking in too much and thus making the economic downturn unnecessarily deep and long-lasting.
“Real interest rates are still very low,” says Schnabel in an interview with the German newspaper Frankfurter Allgemeine Zeitung.
The real interest rate is calculated by adjusting the interest rate for inflation, and the ECB’s key interest rate is after the latest interest rate increase on December 15 at 2.50 percent, which can be compared with inflation in the eurozone measured at over 10 percent in November, according to Eurostat.
— The interest rate increases will continue for a period, says Schnabel.
The message is in line with the unexpectedly hawkish message that ECB chief Christine Lagarde delivered when interest rates were raised just over a week ago.
Since July, with a series of unusually large interest rate hikes, the ECB has raised the key interest rate by 250 points (2.50 percentage points), up from zero.