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ECB’s Knot Says He Fully Supports Lagarde’s Monetary-Policy Plan

Published 05/25/2022, 06:16 AM
Updated 05/25/2022, 08:54 AM
© Bloomberg. Klaas Knot, president of De Nederlandsche Bank NV, speaks during a panel session on day three of the World Economic Forum (WEF) in Davos, Switzerland, on Wednesday, May 25, 2022. The annual Davos gathering of political leaders, top executives and celebrities runs from May 22 to 26.

(Bloomberg) -- European Central Bank Governing Council member Klaas Knot said he endorses President Christine Lagarde’s new policy timetable, which foresees an exit from negative rates by the end of the third quarter. 

“I’m fully on board, I fully support everything that is in the blog,” the Dutch central banker said at panel discussion in Davos Wednesday. “I think it nicely charts the policy course.”

The comments by Knot, a hawkish voice on the Governing Council, contrast with his Austrian counterpart Robert Holzmann, who on Tuesday called for a half-point hike in July. That’s double the magnitude implied by Lagarde. The ECB’s deposit rate has been negative since 2014 and currently stands at -0.5%. 

 

Knot also said:

  • Inflation expectations have continuously moved upward
  • ECB is closely watching underlying inflation, wages
    • He’s not yet seeing wage inflation that’s comparable with the US
  • Inflation in the euro area is more driven by the supply side than in the US

©2022 Bloomberg L.P.

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