ECB Governing Council Member Mahrouf Calls for Readiness for Further Rate Hikes

European Central Bank Governing Council member Mahrouf stated that if inflation develops in the "wrong direction," the ECB should not shy away from further rate hikes. Currently, the inflation rate in the Eurozone is above 3%, and economic growth is slightly stronger than expected, which makes him feel "uneasy." He pointed out that even if the benchmark deposit rate rises to 2.5%, monetary policy will still not impose a restrictive impact on economic activity, and truly restrictive policies will only emerge once rates exceed 2.75%. Mahrouf expects the ECB to slightly raise its economic growth forecast for the Eurozone this year. He mentioned that it is still unclear whether further rate hikes will be needed after next week's increase, and the ECB should continue to adhere to a "meeting-by-meeting" decision-making strategy to avoid providing forward guidance. Inflation expectations are in a good state, and there are no signs indicating that wages are creating a second-round inflation effect; related risks are being controlled.

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