German Inflation Remains High, ECB Not Hitting Target Until 2025: Bundesbank President Nagel
Updated: Mar 27, 2023, 14:37 UTC•1min read
Deutsche Bundesbank President Nagel warns of high inflation and calls for acceleration of quantitative tightening to reduce ECB’s bond portfolio.
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Takeaways
- Deutsche Bundesbank President warns of excessively high inflation
- German inflation remains high, ECB target not met until 2025
- Quantitative tightening acceleration called for by Bundesbank President
- Nagel believes market can handle swift reduction of ECB’s portfolio
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Overview
On Monday, Joachim Nagel, President of the Deutsche Bundesbank, stated that German inflation remains excessively high and that the European Central Bank (ECB) will not achieve its 2% target until 2025.
Nagel further noted that the ECB has ceased purchasing government bonds and is cautiously decreasing its securities holdings by €15 billion per month.
Given the ECB’s current bond portfolio of approximately €5 trillion, Nagel advocated for an acceleration of quantitative tightening, which he believes the markets can handle.
Nagel argued that swift reduction of the Eurosystem’s balance sheet is necessary from a monetary policy perspective.
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