Central Banks
ECB’s Kazaks Says Rate Peak Is Impossible to Identify Right Now
- Interest-rate steps can get smaller if they’re supplemented
- Kazaks says first quarter would be a good time to start QT
European Central Bank headquarters in Frankfurt.
Photographer: Martin Leissl/Bloomberg
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The European Central Bank must raise interest rates much further, but it’s impossible to say how far because economic uncertainty is too high, according to Governing Council member Martins Kazaks.
“Nobody at the moment can know with any precision where exactly the terminal rate will be,” Kazaks said in an interview in Riga. Borrowing costs “are still way below where they should be” and must move to levels that equate to monetary tightening, not just a withdrawal of stimulus, he said.