FX

ECB’s Visco: Significant worsening of economic outlook is cause for concern

European Central Bank (ECB) must continue to raise rates even though long-term inflation expectations remain anchored, ECB Governing Council member Ignazio Visco said on Friday, as reported by Reuters.

Key takeaways

“Approach to policy tightening will be defined meeting by meeting based on data.”

“Euro area mid-term economic prospects important to establish more appropriate final level, proceeding gradually.”

“No obvious reason at present to tie our hands with idea of exceptionally high rate increases.”

“Rate hikes could have the biggest impact on inflation once economy has already significatly slowed down.”

“Significant worsening of economic outlook is cause for concern.”

“Impossible to fully offset impact of energy shock on wages, profits.”

“Fiscal policy can redistribute impact, but increasing debt would unfairly shift burden on future generations.”

Market reaction

These comments don’t seem to be having a noticeable impact on the shared currency’s performance against its rivals. As of writing, EUR/USD was down 0.2% on the day at 0.9795.

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