Provided by Francesco Canepa and Balazs Koranyi
Frankfurt (Reuters) -Europa Central Bank should maintain stable interest rates as the euro area economy is in its own rates and inflation may still be higher than expected, ECB policy -based ISABEL Schnabel said Reuters.
The central bank of 20 countries, sharing the euro, floods the year of relief in July, and political makers are now waiting for you to see the full impact of US duties before deciding whether to borrow costs.
Schnabel, the most influential among ECB hawks, as it is known that political makers who support higher indicators said they did not see more reduction, and the current, 2% policy rate can be “gently” stimulating an already high economy.
“I think we can already be gently applied, so I don’t see the reason why the rate is further reduced in the current situation,” the German economist said in an interview.
The ECB interest rates are expected to be detained in the next September 11th. But investors see a good chance that it will re -lower interest rates by June, according to money market data. Sources also said in Reuters’ discussions about further relief in the fall.
US President Donald Trump’s pressure in the US Federal Reserve Bank is expected to reduce tariffs this month.
However, Schnabel said the Euro area economy was better than expected due to “strong domestic demand growth” and that it was now a “significant fiscal impulse” from Germany’s investment in infrastructure and military.
In contrast to many of her colleagues and the ECB’s own forecasts, Schnabel said Trump’s administration’s administers would increase inflation in global trade, even without the European Union.
“I continue to believe that rates are pure inflation,” Schnabel said. “If the rates increase in cost prices around the world and emit through global production networks, it will increase inflation pressure everywhere.”
She also said the rates would disrupt the supply chains, indicating China’s restrictions on several rare land export restrictions and the US decision to tax even low value parcels.
This, along with rapidly rising food prices, meant that Schnabel saw “risk balance as tilted up”, which means that inflation can surpass ECB forecasts 1.6% next year and 2% 2027.
Although Schnabel was not currently not for the increase in rates, she thought that central banks around the world could come in tightening times, faster than thinking about trading curbs, fiscal large and older populations.