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ECB · Eurozone · Inflation · Interest Rates
European Central Bank policymaker Isabel Schnabel confirmed the central bank will implement further interest rate increases to achieve its 2% medium-term inflation target, despite some short-term improvements, according to remarks released by Econostream and reported by Fxstreet.
Schnabel emphasized that the ECB is not finished with monetary tightening, stating that the current situation, while appearing better than anticipated, does not warrant complacency. The ECB's primary mandate is price stability, aiming for inflation around 2%, and its main tool is adjusting interest rates.
Higher rates typically strengthen the Euro. The Governing Council, including President Christine Lagarde, makes these decisions eight times annually.
The ECB previously utilized Quantitative Easing (QE) during crises to stimulate the economy, which generally weakens the Euro, and subsequently employs Quantitative Tightening (QT) during recovery phases to combat rising inflation, which is bullish for the Euro.
