A Eurosystem insider claimed he would support another 50 basis points interest rate hike by the European Central Bank if the Eurozone economy or inflation don't significantly decline.
The source told Econostream Media in an interview published on Friday that the ECB remains in tightening mode, arguing a 50 bps increase shouldn't be considered a major hike with real interest rates "clearly negative ... I think there is no doubt that we are still in a tightening mode, but as far as the next move, there is nothing to be said now - we can wait until May," he added.
However, markets can expect a 25 bps rate hike if economic activity slows, the insider stressed, concluding that the terminal rate could reach 4.5% only if inflation keeps persisting.
