ECB's Knot: ECB unlikely to be done with rate hikes

Eren Sengezer FXStreet

European Central Bank (ECB) policymaker Klaas Knot said that the ECB is unlikely to be done with rate hikes and added that the still thinks that they need to raise the policy rate in May. Knot, however, refrained from mentioning the size of the hike, as reported by Reuters.

Additional takeaways

"Core inflation shows no sign of abating; wages and services are its main drivers."

"Inflation risks clearly tilted to upside; second round wage effects increasingly visible."

"Bank turbulence must have significant permanent impact to alter inflation baseline."

"Could gradually move to full stop in AOO reinvestments if there is no more market turmoil."

Market reaction

EUR/USD continues to trade in positive territory slightly below 1.0800 following these comments.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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