ECB’s Kazaks pushes back on rate cut bets as core prices rise.
European Central Bank policymaker Martins Kazaks is pushing back on investor bets that the ECB will cut interest rates by the end of this year, saying it would take a deep recession for borrowing costs to be lowered.
Money markets expect the ECB to raise the rate it pays on bank deposits by nearly 150 basis points by the summer before reversing course in late 2023 and next year, likely implying a downturn in growth and inflation.
But Kazaks told Reuters he failed to see a “rationale” for that and that rates should continue to rise to curb inflation, which is running at nearly five times the ECB’s 2% target in the euro area.
