"Further significant interest rate steps might even be necessary" after the March rate hike, European Central Bank Governing Council member Joachim Nagel (pictured) warned on Wednesday.
In the current situation, Eurozone "key interest rates need to be even higher" to push inflation down to the 2% target "in a timely manner," the Bundesbank president said at a press conference in Frankfurt. Rate cuts are a "non-starter" until underlying inflation is evidently on the way down, according to Nagel. In addition, he called for "a steeper path of reduction" of the ECB's portfolio of securities from July.
Nagel also pointed out that fiscal policy measures should be targeted, cautioning that "broader and more indiscriminate" action could result in "additional inflationary pressure."
