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Austrian Central Bank Head Robert Holzman said on Thursday that the Eurozone interest rates should be held until the European Union is more clear on the road and counteraction to the European Union.
“We have not seen this uncertainty for many years … If only uncertainty will not fall, the right solutions we will have to restrain a number of our decisions, and thus we do not yet know which direction the monetary policy should be better transferred,” Karolin Roth CNBC said in an interview in the World Spring IMF.
Holzman is widely regarded as one of the most elegant members of the European Central Bank voting, in favor of a slow approach to the weakening of the monetary policy when Inflation is reduced. Head of the ECB Council voted unanimously To reduce the quarter of the percentage point at the April meeting, its seventh decrease in the current cycle, but Holzman confirmed that he made a decision with caution and noticed the need to wait for additional data.
He said CNBC that there was a “wide consensus” around the rate of rates, but some disagreement on the border.
“My assessment is that at this time it was not yet clear to what extent (tariff) counter -officers are accepted. Because when in Europe, prices may increase. Without counter -times, the price pressure is reduced. And yet we do not know the direction,” he said.
According to President Donald Trump’s market policy, the European Union faces a 20% blanket on US exports, as well as 25% of US aluminum, steel and talks that most countries were killed. Trump on 9 April announced 90-day pause on full universal tariffs by prompting EU to suspend your own The initial tranche of the oncoming measures during the negotiations is carried out.
Holzman said CNBC that while different scenarios remained possible for prices and rates, at the time when the direction was down.
“Before considering the data, the question in what political decisions will we make? Will we have an increase in tariffs? Will we have a strong increase in tariffs?
“This high uncertainty that we have now, you can find everywhere. You can find it at the growth level. You find it at the stock market level. So, we look at everything and try to make sense from it. But it’s too early to say it’s data.”
In an interview with CNBC earlier this week, the President of the European Central Bank, Christina Lagardo, said that the monetary policy has done its work, and the process of disinflation in the euro area is “approaching completion”.
“We must continue to check the data,” she added, saying that the Central Bank will “depend on the data to the extreme.”
The index replacement prices over the night on Thursday offered market expectations for another 25 basic indicators at the next meeting of the ECB in June, taking a key rate to 2%, and another reduction in the same size by the end of the year.
“There may be additional reductions this year, but the number is still great,” Holzman said on Thursday.
“Uncertainty is similar to tax without profit”: knot
ECB Member Klaas Aka, which is usually considered as a hay, said CNBC on Thursday that he was “fully open” about the June decision on the interest rate, saying that “too early” to take office.
Cherven decision will depend on the economic forecasts of the ECB officers, including a medium -term inflation forecast, the knot said in a conversation with Caroline CNBC.
“It’s actually the time when you need forecasts,” he said. “The forecasts where you see the profile of both growth and inflation.”
The current economic uncertainty can be in the short and long term, the CNBC knot said.
The short -term perspective, “Crystalov clearly” that the uncertainty created by the American tariff policy was “a strong negative growth factor,” he said. “This is basically an uncertainty about a income tax.”
In the short term, inflation may also be lower, the knot added – but said that in the medium period it is much less clear.
“I think there are still these negative factors. But in the medium term you can take revenge. You can get a violation of the global value chain that can also be inflation in the world than the US.
In Europe, there have been various changes in financial policy in recent months, including German forces to provide higher protection costs and launch an EUR 500 billion (569 billion dollars).
So far, however, Knot said that the ECB was “in a pretty good place” when it comes to interest rates because they were neither restrictive nor stimulating.
“I think this is a good place to be. And as soon as there will be more clarity, as it will affect medium-term inflation, of course, we can think about what to do with the tariffs,” he said.
