this Governor Pablo Hernández de Cos of the Bank of Spain said on Thursday, “indicator” that interest rates officers can go up from 1.25% valid for a fork 2.25% – 2.5% in March of next year, Keep at this level for “most” 2023 and 2024. However, he warned “definitely” about a loyalty By the European Central Bank (ECB), of which the governing council is a member, but “to provide an economic analysis study” citizenship specific orientation“.
XXI of the Spanish Confederation of Managers and Managers (CEDE) in Bilbao. In his speech at the Congress, the senior official acknowledged and underlined that “nobody knows where ultimate level that the monetary authority will increase the price of money in the euro zone. This is because, he explained, “very high uncertainty” The evolution of inflation and economybut also about orbit ukraine war and its geopolitical implications.
Despite this, the Central Bank of Spain has conducted an analysis based on its own data. macroeconomic models To get an array with the information currently available “most likely values” Interest rate hike in line with the ECB, inflation 2% This is where the median value of 2.25-2.5% comes in, although the exercise gives a breakdown of possible outcomes. 1.75% and 3%. “As an estimate, this range is entirely data dependent and you can change shift. However, I think a valuable tool to show some way to the citizens,” he said.
message war
Hernandez de Cos, consultants The ECB considers ‘pigeons’So the defenders flexible interpretation and a large part of its mandate that takes more into account the economic situation, such as the Irish chief economist of the institution Philip Lane. With unusual prediction disclosed, the governor wanted to send a message to market (very variable in their estimates of how far interest rates will go), also for thoughtful advisors ‘Hawks’ (those advocating sticking to the goal of achieving price stability), public to accelerate rate hikes.
ECB’s governing council plans four meetings He will decide on monetary policy by March. If the Bank of Spain’s prediction comes true, it means it will raise interest rates. 100 or 125 basis points At its meetings in October, December, February and March. To put it in perspective, last two raised rates 125 points: 50 basis points in July and 75 basis points in September (for the first time in history).
2.25-2.5% range, Money Politics not neutral but restrictive for economic activity. Therefore, it will be above 1-2%, which is estimated to mean monetary policy. naturalneither expansive nor restrictive. However, at the same time less than 3% which market forecasts now these rates will rise, with this the Bank of Spain has sent a message moderation. In addition, a level above neutral I would have to go down towards this level that analysts currently estimate approximately at 1.5%.
Balance Reduction
The forecast is also based on the ECB not starting to shrink its balance sheet (stops) revoke debt acquired in recent years after the amortization period has expired). If you do, something will start see you in the next monthsThere can be types load less The governor pointed out that the same tightening in monetary policy will be achieved in both ways. “The ECB may decide to start reducing its ‘stock’ of assets. earlier than the markets expected. right now,” he continued.
“I hope my words assured when it comes to our willingness curb inflation without to cause something unnecessary pain ours citizens of the eurozone. “We are living in difficult times, but we hope to meet the challenge,” said Hernández de Cos.