High rates for a long time. The Bundesbank expects another tightening of the ECB

Expectations on the ECB’s interest rate peak have been made less optimistic by the latest statements by the president of the Bundesbank, Joachim Nagelwho in an interview with Bloomberg not only did he say that the cost of borrowing could continue to rise after the summer but that once it peaks it “could stay there for a while”. Translated, it means that the Eurozone has to prepare for a fairly long period of high rates – with a final level that is now estimated by Unicredit analysts in a range between 4 and 4.5 percent – ​​before seeing the descent that could only start in the second half of 2024 and not at the end of this year . “Inflation is still very sticky” and “price increases are a very stubborn phenomenon”, explained Nagel, accentuating the “hawkish” tone used by the president of the ECB, Christine Lagardeafter the last meeting in which the rise of 0.25 basis points was the compromise found with the “doves” of the board who would like a slowdown in the pace of monetary tightening.