The CEO of CaixaBankGonzalo Gortazarestimated this Tuesday that the interest rates officials of the European Central Bank (ECB) will not be placed by below 3% in the next two years. “The market assumes that end of next year there may be rate falls. In any case, if they fall, they will fall from around 4% to around 3-3.5%. We have to forget about interest rates below 3%,” he noted at an event held by the CEDE directors’ association in Granada.
Between July 2022 and last September, the monetary authority of the euro zone carried out the bigger and faster increase in the price of money history to combat the inflation. Thus, the main type is already located in the 4.5% (the highest level since May 2001), while the deposit facility (the interest with which the central bank remunerates the money it keeps in the banks, the most relevant in the current context) reaches an all-time high 4%. The institution has pointed out that, if its inflation forecasts are met, it won’t go up any more the rates, although he has added that he will maintain them higher for longer.
Gortázar has translated this message into deadlines. “The vision we have is that the ECB is going to achieve stop inflation, but it will not be immediate. Inflation is decelerating and that would justify not continuing to raise interest rates, it is the feel majority From the market. Maybe there is a rise of 25 basis points, up to 4.25%. In return, they can be expected to remain at these levels for longer. Market expectations were for relatively rapid rate rises and falls, but in the coming three or four quarters there will be no falls“he argued.
Decrease of 0.5 points
He study service The bank, in fact, estimates that the ECB’s main rate will be 4.5% at the end of this year and in the 4% at the end of the nextwhile the deposit facility will be 4% and the 3.5%. This forecast, made in mid-September, implies that the central bank rwould cut rates by 0.5 points next year. Consequently, CaixaBank economists estimate that the euribor will drop from 4.08% next December to 3.06% in the last month of 2024.
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He aim of the ECB is to bring inflation in a sustained manner to 2% in the medium term, from 4.3% last month. The goal is not reached until 2025, according to the agency’s latest forecasts. That is what makes CaixaBank think that the rates they won’t go down much in the next two years. “Doesn’t seem likely that, if we go to inflations that could tend to 2% in 2025, monetary policy will take us back to rates that were even negative and a little surprising. These rates are not going to return in the near future,” Gortázar predicted, referring to the era of ultra low rates prior to the inflationary spiral that began in the summer of 2021.
The banker has also pointed out that the Eurozone GDP may have fallen in the third quarter, while that of Spain It is somewhat above but also “he is suffering” the effects of the rate hike. However, he wanted to qualify it: “In Spain, deceleration sometimes makes us think that a crisis or situation of maximum difficultybut that is not what we expect, but a soft landing“. He has also defended that it is “essential to return to fiscal discipline“.