Governor, Nationale Bank van België / Banque Nationale de Belgique and hence European Central Bank Governing Council member Pierre Wunsch spoke on Saturday:
- at the Dubrovnik Economic Conference of the Croatian National Bank
Posting this as a bit of a catch-up ICYMI (as I did!).
Wunsch warned that continued expansive fiscal policy would require a larger reaction from monetary policy.
- ‘On fiscal of course, we would hope and expect some consolidation. … If fiscal remains supportive, then monetary policy would have to do more to get inflation under control.’
- ‘This is going to imply higher interest rates and, at the end of the day over the medium term, higher deficits because of the debt burden and a higher risk of fiscal dominance.'
Adding:
- 'We hiked 400bp and we might have to do more'
- said rates were still 'quite low' in real terms, said monetary policy makers have more ground to cover.
