ECB's Visco: Must be careful to avoid unnecessary, excessive rise in real interest rates

Weekend comments from a member of the European Central Bank European Central Bank The European Central Bank (ECB) represents the central banking entity in the Eurozone that oversees monetary policy for the bloc. As a growing geographic and economic region, the eurozone now includes 19 countries, which rely on the euro as their national currency.The eurozone presently consists of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain.In terms of monetary The European Central Bank (ECB) represents the central banking entity in the Eurozone that oversees monetary policy for the bloc. As a growing geographic and economic region, the eurozone now includes 19 countries, which rely on the euro as their national currency.The eurozone presently consists of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain.In terms of monetary Read this Term Governing Council and Governor of the Banca d'Italia Ignazio Visco.

He was speaking at the Warwick Economics Summit:

• “Today, disinflation is obviously needed, but given the levels of private and public debts that prevail in the euro area, we must be careful to avoid engineering an unnecessary and excessive rise in real interest rates”
• “Indeed, I am convinced that the credibility of our actions is preserved not by flexing our muscles in the face of inflation, but by continually showing wisdom and balance.”

Added he didn't know high how rates would rise, but said hikes would be data-dependent:

• rates must continue to rise “in a progressive but measured way, on the basis of the incoming data and their use in the assessment of the inflation outlook”.

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EU inflation is currently circa 8.5%.

ECB rates are in the pic below. Not even close to being a positive real rate at present.

Visco jaw flapping on this is just hot air.

Un Real. Really.