European Central Bank Governing Council member Martin Kazaks (governor of Latvia's central bank) spoke in a phone interview with Bloomberg.
Bloomberg is gated. Kazaks' main points:
- “Currently I would see that at the Feburary and March meetings we will have significant rate increases”
- “Of course the steps may become smaller as necessary as we find the level appropriate to bring the inflation down to 2%.”
Kazaks is considered to be at the more hawkish end of the European Central Bank policy maker spectrum. The fall in German infaltion: - Germany December preliminary CPI +8.6% vs +9.1% y/y expected
will not be enough to divert the ECB, Kazaks especially, from its inflation fighting approach. The ECB is in a rate hike cycle, trying to combat high inflation. Currently we have had +250bp from them and expectations currently centre on another 2 hikes of +50bp to come.
