ECB's Schnabel: Will probably need to raise rates into restrictive territory

Eren Sengezer FXStreet

European Central Bank (ECB) Governing Council member Isabel Schnabel said on Thursday that they will probably need to raise interest rates further into restrictive territory, as reported by Reuters.

Key takeaways

"In the current environment, there is a risk that monetary and fiscal policies may pull in opposite directions."

"We continue to stand ready to counter fragmentation in financial markets that is not justified."

"Incoming data so far suggest that the room for slowing down the pace of interest rate adjustments remains limited."

"The new macroeconomic environment requires a different mix of monetary and fiscal policies."

"The largest risk for central banks remains a policy that is falsely calibrated on the assumption of a fast decline in inflation."

Market reaction

These comments failed to trigger a noticeable market reaction and EUR/USD was last seen trading at 1.0410, where it was up 0.15% on the day.

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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