ECB's Kazaks Warns of Further Rate Hikes to Contain Inflation

European Central Bank (ECB) policymaker Martins Kazaks believes that more gradual rate hikes may be necessary to contain inflation. The ECB recently lifted its key interest rate to 2.5% from 2.25%, with Kazaks suggesting that this level should not be treated as a ceiling. He argued that rates may need to enter restrictive territory, and the case for further tightening is strengthening.

Kazaks made these comments in an interview with Reuters, citing concerns about the impact of higher fuel costs linked to potential conflict with Iran on inflation. The ECB has already cautioned that price pressures stemming from this conflict could persist, leading to expectations of further interest rate hikes as early as October.