The European Central Bank (ECB) is expected to raise its interest rates by 50 basis points in February followed by another 50 basis point hike in March. This comes after ECB governing council member Klaas Knot explained during an interview with Dutch broadcaster WNL on Sunday that the ECB is determined to continue raising its interest rates for several months to come.
“Expect us to raise rates by 0.5% in February and March and expect us to not be done by then and that more steps will follow in May and June,” Knot explained during the interview.
In a separate interview with the Italian newspaper La Stampa that was published on Sunday, Knot reiterated his belief that the ECB would continue to raise interest rates for the foreseeable future, explaining that it is still “too early to tell” if the ECB should slow down its interest rate hikes going into the summer months.
Knot stated that, over time, the risks that are influencing the inflation outlook will subside, thereby creating a more balanced outlook as investor confidence is restored. While Knot insists that such changes are still far away, he did acknowledge the possibility of bringing interest rates down from 50 to 25 basis points in the future.