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It's “unrealistic” that the European Central Bank will raise interest rates in June, Governing Council member Gabriel Makhlouf told the Financial Times in an interview.
The central bank may stop net bond purchases in June or a few months later, after which it would raise rates, he told the newspaper, adding that there's “a bit of difference” between its schedule and the one market participants are anticipating.
Makhlouf, who heads the Irish central bank, said he is “reasonably confident” the ECB's bond-buying program will end this year and that the question will be “what is the pace at which my foot sits on the accelerator, and am I talking about June or am I talking about the third quarter,” according to the report. He expects policy makers to be cautious about harming the recovery.
The ECB will have to determine the durability of recent price pressures, which may depend on how fast wages rise in response to high costs of living, said Makhlouf. He added that there was talk of wage pressures in his discussions with businesses, but that he didn't have strong evidence of things moving.
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