Central Banks
ECB Divergence From Fed Would Fuel Inflation, Holzmann Says
- Further rate cuts would risk impact on FX markets, inflation
- Robert Holzmann in interview with public broadcaster ORF
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Further reductions of European Central Bank borrowing costs may risk a stronger impact on the euro exchange rate and inflation, according to Governing Council member Robert Holzmann.
“If the original assumption of three rate cuts were to materialize, and the Federal Reserve didn’t respond, it would certainly have an impact on the exchange rate, and with it inflation,” Holzmann told public broadcaster ORF in a radio interview aired Saturday.