ECB's Martins Kazaks signaled a rate hike in July.
In an interview with Bloomberg, Kazaks said that he is not against traders' expectations for deposit rates to rise to 0 percent this year, from a record low of minus 0.5 percent.
On the subject, Kazaks said, "A rate hike is possible in July and I have no reason to oppose the pricing in the markets. We are on the path of policy normalization. We will gradually go to zero and then above this level."
Due to the record high inflation rate of 7.5 percent in the Euro Zone, policy makers' interest rate hike messages are also increasing. In money markets, a 25 basis point rate hike until July is priced above 50 percent. In September and December, interest rates are expected to increase by 25 basis points each.
However, the ongoing war in Ukraine causes policy makers to act cautiously.
Despite this, the US and UK Central Banks started a tightening cycle due to inflation.
The European Central Bank, on the other hand, is at the center of criticism for ignoring the inflation risk.
Known for his hawkish views, Kazaks "gradual increase does not mean slow. A 25 basis point rate hike seems appropriate for now. However, policy makers may also discuss larger increases depending on economic data." made its assessment.
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