In the Asian session on Wednesday (May 10), EUR/USD rose slightly, temporarily reporting 1.0969, an increase of 0.08%. European Central Bank President Christine Lagarde believes that as the ECB works to return inflation to its 2% target, they may tighten monetary policy further. Several of Nagel’s Governing Council colleagues backed Lagarde’s view.
ECB Governing Council Nagel said the ECB was not yet done with raising interest rates as price pressures remained “extremely high”. But all members decided to raise interest rates by 25 basis points and speed up the reduction of the European Central Bank‘s bond portfolio. Nagel said that people now feel that monetary policy is suppressing the economy, but it must be done if inflation is to be broken, and the size of the rate hike is no longer as important as it was last year.
