On June 25th, European Central Bank Vice President Guindos said in an interview with Spain’s Abezai newspaper that the European Central Bank is entering the “final stage” of its tightening cycle.
When the ECB stops raising rates “will depend on the data”. “The change in the core inflation rate is very important.” Guindos also said in the interview that the monetary policy implemented by the European Central Bank and the base effect “will help” to slow down core inflation. It is important to “look at second-round effects, that is, everything related to wage growth and the evolution of unit labor costs”.
If second-round effects become compounded, “monetary policy will have to act more forcefully”. Fiscal policy must also play a role in reducing inflation.
