“The European Central Bank (ECB) could raise interest rates into next year, causing pain for consumers as it tries to depress demand that is now increasingly adding to sky-high inflation,” ECB Chief Economist Philip Lane said on Saturday per Reuters. “At 0.75%, the ECB's deposit rate is still too low as it continues to stimulate the economy, so the ECB's job is not yet done,” ECB’s Lane added.
Additional quotes
Although Lane said rates could continue to go up at each remaining meeting this year and may rise early next year, too, the ECB is keeping an open mind about where to stop and will decide meeting by meeting.
Lane added that the eurozone economy is likely to flatline over the winter months and a recession could not be ruled out given high energy prices and a shortage of natural gas.
Elsewhere, said ECB Governing Council member and German central bank head Joachim Nagel stated that the ECB rates are far away from levels that are suitable for inflation. The policymaker also added that he doesn’t see a hard recession while mentioning that the ECB must be resolute on rates in October and beyond.
EUR/USD grinds higher
EUR/USD braces for this week’s Federal Open Market Committee (FOMC) meeting while grinding higher around 1.0015 by the press time of early Monday morning in Asia.
Also read: EUR/USD sees upside above 1.0050 despite soaring Fed bets
