Member of the European Central Bank (ECB) Governing Council and Bank of Spain Governor Pablo Hernandez de Cos stressed on Wednesday that inflation risks are currently more moderate because the market has reacted favorably to the ECB's decisions to raise interest rates in order to halt the CPI's upward trend.
During his address at the 2023 Annual Meetings of the World Bank Group and the International Monetary Fund, De Cos said that the inflation target level of 2% can be achieved if interest rates are kept at the current level for a sufficiently long period of time and therefore noted that it is still too early to discuss rate cuts.
The central banker also warned that gross domestic product growth is likely to slow and did not rule out the possibility of negative figures in the third quarter.