Bundesbank President Joachim Nagel acknowledged the rising doubt and escalating criticism around the necessity for more rate hikes. Yet, he insisted on the need for further tightening. He attributed his stance to the robust health of the labor market and the positive growth in the economy.
“We still have a way to go,” Nagel stated, referring to the ECB’s inflation-fighting measures. “Monetary policy signals are clearly pointing in the direction of more tightening”.
Furthermore, Nagel voiced his advocacy for the significant reduction of the Eurosystem’s balance sheet in the forthcoming years, following its expansion due to massive bond purchases and bank loans.
