A rate hike in the Eurozone in September is seen as a possibility at most – monetary policy

The Dutch central bank governor and member of the European Central Bank (ECB) says that after the interest rate hike in July, everything is in the extreme field of possibility.

For July, I think an increase is necessary [as taxas de juro diretoras]Klaas Knot explains.

Already looking after this monetary policy meeting, the governor, who has previously emphasized that he does not consider himself a “hawk,” added that a signal of a new rate hike is “at most likely, but by no means certain.” , although it is well known.

At the last monetary policy meeting, European Central Bank President Christine Lagarde already made it clear that interest rates will rise in July.

Looking at the next few months, Claes Nott added, it is “impossible to say” about the direction of the Conservatives’ vote on the monetary policy path, as “there is a lot of relevant data due out by September.”

This Tuesday, the Governor of the Bank of Italy, Ignazio Fiesco, a more “downbeat” voice for the ECB, defended that inflation will fall faster than expected by the central bank.

“The European Central Bank expects inflation to fall by the end of 2025 to 2%, but my impression is that this will be faster,” concluded Visco. Inflation slowed to 5.5% y/y in June in the Eurozone.

At the last meeting, the European Central Bank raised interest rates by 25 basis points. Thus, the interest rate applicable to major refinancing operations is reduced to 4%, which applies to permanent liquidity facilities to 4.25% and to permanent deposit facilities to 3.5%. In less than a year, the monetary authority led by Christine Lagarde has increased the price of money by 400 basis points.