The ECB could raise rates as soon as an hour, Holzmann says

The ECB could raise rates as soon as an hour, Holzmann says ...

The Central Bank could raise the rate immediately after the end of next year, and end the debts would be a strong signal that the move is coming in two quarters, said Robert Holzmann on Wednesday.

The ECB took another step last week to restore crisis-era stimulus to allow the debt market to be rescheduled, stating that it would end emergency bond purchases in March but temporarily double the pace of its longer-running Asset Purchase Program (APP) to ease the transition.

"We can reduce or suspend the still outstanding APP purchases. That's a price signal to the markets because we've established that only after the suspension or stop the purchases will interest rates be increased," Holzmann told a news conference.

In extreme cases, it would be possible... to suspend the purchases in a data driven manner this year and even so to speak for the next and end of the year or the start of the second year, the third interest-rate increase the United States.

We're always a little late, says Holzmann. It turns out, "this year" means 2022.

Holzmann was a central banker of Austria.

The ECB approved the measure on Thursday and the majority of policymakers opposed it and in fact, the conservative central bank chiefs of Germany, Austria and Belgium opposed the easy money policies of the ECB.

The ECB increased its inflation projections across the board and has seen inflation drop by 32% next year, well above target, in 2023 and 2024. Several policymakers questioned those projections arguing that the bank is underestimating the risk of financial gain holding above the 2% target.

"Normally if we say that we don't need any more cash and pay with some extra cash, because our inflation expectation is near or above 22% in 2023 and 2024, then that would definitely be a strong signal that the interest rate will be increased in the following or the following quarter," Holzmann said.

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