European Central Bank Governing Council member Martin Kocher stated that the ECB must decide at its June meeting whether to raise interest rates or keep them unchanged.
In an interview published on Wednesday, he said, "We will discuss whether we need to stand pat or raise the rate." He added, "If inflation rises, inflation expectations will be very important. We will get new data in June, which will help us understand what this means for medium-term inflation expectations."
Kocher also commented on inflation, noting, "Expectations for the next five years have fortunately remained stable, but expectations for the next two to three years have increased. We will watch this very closely."
"We make decisions on a meeting-by-meeting basis, and it is impossible to know what will happen before the June meeting."
"If we see a peace agreement, if hostilities in the Middle East end, if the economic outlook becomes clearer, then we would want to avoid unnecessary rate hikes."
"Of course, you don't want to delay a necessary rate hike. That is the starting point for any discussion, and then it's a matter of judging based on continuously updated data whether a hike is necessary."
"Our current situation is still closest to the baseline scenario, but slightly worse than the baseline. We are still far from a negative scenario, but the longer it drags on, the closer we get to that situation."
"It is too early to talk about a second rate hike. At the moment, we are discussing whether to hold or hike, and after taking action, we will observe the follow-up. Admittedly, from an economic perspective, a single 25-basis-point hike does not have a huge impact. But on the other hand, if we hike, it would be a clear signal, after which we would observe and analyze its effects through the data."
"If the situation does not improve, my inclination is: hike once and observe for a while."
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