ECB's Nagel says interest rate hikes coming to final stretch

The European Central Banks' tightening campaign was entering its final phase, the head of the Bundesbank said.

In remarks to Deutschlandfunk radio, Joachim Nagel said that: "We're coming to the home stretch in the sense that we are reaching the area in monetary policy that's considered restrictive," Bloomberg reported.

"I'm confident that monetary policy is showing its effect."

Nevertheless, Nagel went on to say that "We're not yet done with rate hiking.

"There's still work to be done. We need to stay stubborn."

In an interview the day before with the Frankfurter Allgemeine Zeitung, Nagel had said that it was those dampening effects from past rate hikes, that people were beginning to feel, which meant that the size of the ECB's hikes was no longer as crucial as it was in 2022.

When asked by FAZ if he was satisfied with how inflation had been tackled, Nagel answered: "The fight against high inflation hasn’t been won yet. I could also have imagined an interest rate step of half a percentage point.

"But we have already announced further interest rate moves. And we also took a decision that has long been of particular importance to me: as of July, the central bank balance sheet will be run down at a faster pace than hitherto. All in all, then, the decision was fine from my perspective."