ECB’s Kazimir Advocates for At Least One More Rate Hike to Combat Inflation Risks

• ECB’s Peter Kazimir calls for at least one more rate hike.
• Aims to prevent escalating inflation and second-round effects.
• Hike warranted even with some inflation improvement.

European Central Bank Governing Council member Peter Kazimir has indicated that the ECB will need to implement at least one more interest rate hike. This measure is deemed necessary to prevent inflation risks from escalating and to address accelerating second-round inflation effects. Kazimir emphasized the importance of proactive action, noting that such effects are costly to reverse and the central bank should intervene before they become visible. He further suggested that a rate hike would be warranted even if the inflation situation shows some improvement, and a deteriorating economic outlook would necessitate more significant tightening than currently expected.