ECB may need to raise rates by 75 bps in October and December

The European Central Bank will have two more meetings before the end of the year, where the ECB is expected to resolve two issues. The first is the issue of raising interest rates by 75 basis points at once, and the second is the reduction of the balance sheet for the next year due to the high rate of inflation. This was announced by Boštjan Vasle, a member of the ECB Governing Council and governor of the Bank of Slovenia.

At the moment, we can talk about the fastest monetary policy tightening that has ever been. During the last two meetings, the ECB interest rate has been increased by 125 basis points. While at first the ECB's moves were unhurried, in the last few months the pace has increased, which began to indicate tightening.

Vasle noted that 0.75% isn’t enough to push the economy up, however, he believes that it’s necessary to be raised to a level that can slow the economy down. Vasle also said that the rate hike won’t stop, since the current situation requires it.