ECB council member Visco warns against excessive interest rate hikes

“Rising inflation is now accompanied by a sudden deterioration in economic growth prospects,” said Visco, who also spoke on the ECB Governing Council monetary policy co-determined, on Friday in Florence. “Against this background, rate hikes that are too rapid and significant increase the risk of a recession.”

Most recently, a large number of ECB representatives had spoken out in favor of further significant interest rate hikes. A further increase of 0.75 percentage points was often specifically requested. According to Visco, however, the ECB must not orientate itself too much on other central banks and restrict its options for action. “Assuming that the ECB will blindly follow the US Federal Reserve in the coming months could be a serious miscalculation.” Visco is considered a monetary policy dove. He is therefore cautious about tightening monetary policy.

The ECB has raised the key interest rate by a total of 1.25 percentage points in the current year. The Fed, on the other hand, has already hiked interest rates by 3.00 percentage points. At their most recent meetings, both central banks increased their key interest rates by 0.75 percentage points.

/jsl/he

FLORENCE (dpa-AFX)

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