European Central Bank (ECB) Executive Board Member Fabio Panetta, in an interview with the French newspaper Le Monde, stated that it will take several quarters for the effects of the increase in interest rates to be fully felt on the real economy and then reflected in inflation.
Fabio Panetta said, "Our monetary tightening will be felt in the coming months. We cannot rule out that domestic demand will remain weak and this will be reflected in continued economic weakness and even technical recession in the Eurozone."
" The inflation is too high, but there is nothing to worry about," said Panetta, who is among the supporters of loose monetary policy in the ECB Governing Council.
Fabio Panetta pointed out that the ECB has not completely finished raising interest rates, but pointed out that rates will not rise much further.
"I don't think now is the time to move too fast as we have come a long way. We have not yet reached the final target, but we are not far from it," Panetta said.
Meanwhile, since July 2022, the ECB has raised its primary interest rates 7 consecutive times by a total of 375 basis points in response to high inflation. Analysts expect a 25 basis point hike at the ECB rate meeting on June 15.
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