ECB May Make Several Interest Rate Increases in 2011
Tweet
Share
E-mail
European Central Bank council member Axel Weber stated that there are considerable future price pressures as the ECB may make as many as three quarter-point increases to interest rates this year.
“I wouldn’t do anything here to try to correct market expectations at this point,” Weber said in an interview with Bloomberg in Frankfurt on Tuesday. “There are a number of fundamentals in emerging markets, a number of effects which worsen the medium to long-term inflation outlook."
ECB President Jean-Claude Trichet surprisingly hinted towards a rate increase at the central bank's next meeting to combat inflation pressures.
“The forward market seems to price in a reduction in oil prices toward around about $100,” Weber said. “I don’t fully subscribe to this relatively optimistic view. There’s a genuine underlying price pressure for energy and food. I think the ECB has done the right thing, they’ve sent a clear signal that we’re not going to tolerate inflation above our target and I think the market got that signal.”
“I wouldn’t do anything here to try to correct market expectations at this point,” Weber said in an interview with Bloomberg in Frankfurt on Tuesday. “There are a number of fundamentals in emerging markets, a number of effects which worsen the medium to long-term inflation outlook."
ECB President Jean-Claude Trichet surprisingly hinted towards a rate increase at the central bank's next meeting to combat inflation pressures.
“The forward market seems to price in a reduction in oil prices toward around about $100,” Weber said. “I don’t fully subscribe to this relatively optimistic view. There’s a genuine underlying price pressure for energy and food. I think the ECB has done the right thing, they’ve sent a clear signal that we’re not going to tolerate inflation above our target and I think the market got that signal.”
Create E-mail Alert Related Categories
General NewsRelated Entities
Jean-Claude Trichet, European Central BankSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
