Daily Management Review

ECB warns about impact of rate hikes on financial conditions


ECB spokesman Makhlouf: rate increases significantly affect financial circumstances.

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© 2018 Advantus Media, Inc. and QuoteInspector.com
The European Central Bank's interest rate increase has a significant impact on financial conditions, and when choosing what to do next, ECB governors should consider the longer-term impact of rate increases, said Gabriel Makhlouf, member of the ECB's Governing Council.

"We should consider how monetary policy settings will affect economic growth and inflation over the long run. In order to make informed choices about the future of monetary policy, it is critical to consider how current decisions have affected the economy."

The ECB "must be prepared to take the necessary measures" to ensure that inflation returns to target levels in the medium term, according to Makhlouf, and that rates should stay at restrictive levels to stifle demand.

source: reuters.com