ECB/Rehn: Rate hikes to continue after March

Olli Rehn, a member of the European Central Bank’s Governing Council and the Governor of the Central Bank of Finland, said that the ECB should continue to hike interest rates after March and that he expects interest rates to peak in the summer. Speaking to Borsen-Zeitung, Rehn said, “In an environment where inflation remains very high, it seems quite possible, logical and appropriate to continue to hike interest rates after March. It is important that we reach a restrictive level in interest rates and stay there for a while.” Rehn also emphasized that he expects the ECB deposit interest rate to peak in the summer. Markets are pricing in the interest rate, which is currently 2.50 percent, to rise to 3.7 percent by the end of the summer and that the first rate cut will come in the first quarter of 2023. However, Rehn said that there are risks in easing the monetary policy early and that it is too early to talk about a rate cut.