“We can expect that the rate cycle has been completed by now, and with present conditions,” he told reporters in Lisbon.
He said the ECB’s September decision “brought the necessary predictability of monetary policy, by explicitly mentioning that the current level of interest rates is compatible with the convergence of inflation in the medium term towards the objective” of 2%.
The ECB has raised rates at each of its past ten meetings but signalled a pause for October, fuelling a debate among policymakers over whether the monetary authority was done hiking rates or if further tightening was on the table.
Centeno warned that even as the ECB’s nominal interest rates could now remain stable due to declining inflation, real interest rates that directly impact companies, households and economies were still expected to increase, requiring “some caution with decisions in the near future”.
“The transmission of monetary policy is delayed in time, takes time to happen and does not impact all countries in the same way at the same time,” Centeno added.
Source: Economy - investing.com
