Senior European Central Bank policymakers have said they expect interest rates to rise beyond the point at which they constrain demand and weaken growth to bring down inflation, rebuffing criticism from eurozone politicians of moves to tighten monetary policy.
The comments from several members of the ECB’s rate-setting governing council push back against the idea it could do a “dovish pivot” and stop raising rates soon, echoing a similar message from the US Federal Reserve last week.
German central bank boss Joachim Nagel said in a speech on Tuesday that he would do all he could to ensure that the ECB would “press ahead with monetary policy normalisation with determination — even if our measures dampen economic growth”. By normalising policies, central banks aim to reach a point whereby they are neither stimulating nor restraining growth.