(Finance) – “At the moment it seems that we are administering the right dose of interest rate hikes. But as in medicine, in monetary policy it is important to keep an eye on the patient. We must not reduce the dose too early and jeopardize the results obtained. This is a challenge. In my opinion the price perspective is not yet clear enough: for this reason It’s too early to cut interest rates“. He stated it Joachim NagelPresident of the Bundesbank and therefore member of the Governing Council of the European Central Bank (ECB), in an interview with Frankfurter Allgemeine Zeitung.
Speaking about market expectations, Nagel said that Frankfurt wants to “avoid a situation in which financing conditions in the market become too flexible and thus no longer manage to sufficiently curb inflation. Even the Sharp price fluctuations are undesirable“.
“But every now and then we central bankers should give a signal to the players – he added – I don’t care whether market participants are right or not with their bets: we must not protect anyone from wrong speculation. But if financing conditions do not match the inflation outlook, maintaining price stability becomes more difficult. And this is our job.”