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This year, the ECB should raise interest rates two or three times.

Reuters:Hawkish European Central Bank policymaker Robert Holzmann said in an interview that the bank should raise interest rates as many as three times this year to fight rising prices.

“Take at least two or three steps.” These could be smaller percentage points, like 0.25 percent each. If this were to happen by December, it would mean that by 2023, the deposit rates for banks, which are now -0.5%, would be positive. The head of the Austrian central bank was quoted as saying.

“Even though you won’t be near the natural nominal interest rate, you’ll still be a long way away.” A long way to go, though. Then, it would send a good message to the public. “

ECB policymakers are becoming more vocal about wanting to normalize monetary policy more quickly than previously thought. They are more openly supporting a rate rise in July, and they are saying more about it.

I don’t know if the ECB was too late to do something. I wouldn’t say it was too late. But, maybe things could have been done a little faster. The U.S. is about half a year ahead of the rest of the world in the economy. In this way, it makes sense that the ECB is acting later. Perhaps the Fed was also late. “

When I was asked about the US Federal Reserve’s decision to raise interest rates by half a percentage point, Holzmann said: “That could make imported prices rise.” “The European Central Bank doesn’t set a goal for the exchange rate, and it doesn’t try to do that. That’s not the only thing we’re paying attention to. We also take it into account when making our decisions. We probably won’t be able to make up for the difference we have now by raising interest rates, but at least the gap will not likely get much bigger. “

He also downplayed the risk of a wage-price spiral, in which people want to pay more to keep prices rising.

“We are paying attention to wage settlements. As for now, that doesn’t bother us. That’s why it’s always a risk, to begin with. To avoid possible second-round effects, we would have to raise interest rates even more. That could have an impact on the real economy, but at the moment, that isn’t the case at all. “

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