(Bloomberg) -- The European Central Bank’s monetary policy is correct though a more gradual approach to raising interest rates would have been preferable, Governing Council member Ignazio Visco said.
“Monetary policy is certainly correct,” to tame inflation, which remains high, although he personally “would have pushed for a more gradual approach,” Visco said at an event in Turin, Italy on Saturday.
While the ECB is nearing the end of its interest rate-hiking cycle, after 375 basis points of increases, two more quarter-point moves are expected this month and next, with some officials also suggesting another may be needed in September.
Visco, who also leads the Bank of Italy, is among the more dovish members of the Governing Council. He has always said tightening is necessary but decisions on when and how much to increase rates should be data-dependent, and statements about future hikes should be made with caution due to both economic and geopolitical uncertainty being high at this time.
He added that he sees core inflation slowing in the future as energy prices go down, though it may still take some time.
He also urged governments to make sure their fiscal policies go hand-in-hand with the ECB’s monetary stance so as to avoid counterproductive effects.
©2023 Bloomberg L.P.
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