The Governor of the Central Bank of Ireland, Gabriel Makhlouf, has stated that once eurozone interest rates reach their peak, they are likely to remain there for an extended period. He has also expressed skepticism towards some market predictions of rate cuts towards the end of the year. In the past year, the European Central Bank has raised rates by a combined 375 basis points to combat inflation. Mr. Makhlouf believes that two more small rate increases in June and July are likely.
Mr. Makhlouf has clarified that any further rate hikes after the summer would be a “question of judgement” and he does not want to engage in speculation. He has emphasized that once interest rates have reached their peak, they are likely to remain there for an extended period. However, he has refrained from mentioning how long this period will be.
In a press conference, Mr. Makhlouf stated that he is interested in understanding how some market participants are coming to the conclusion that there will be rate cuts towards the end of the year. He has questioned the basis of their judgement and has not confirmed any such possibility.
The European Central Bank has raised interest rates in an attempt to curb inflation. However, these rate increases have led to concerns about their impact on economic growth. The Irish economy has been particularly vulnerable to the effects of Brexit, and any further rate hikes could have significant consequences.
Mr. Makhlouf has acknowledged that the Irish economy is facing challenges due to Brexit and other factors. He has stated that the Central Bank is closely monitoring the situation and is prepared to take action if necessary. He has also emphasized the need for a “prudent approach” to economic policy, which takes into account the risks and uncertainties facing the economy.
In conclusion, Mr. Makhlouf’s comments suggest that the European Central Bank is unlikely to cut interest rates towards the end of the year. He has emphasized that interest rates are likely to remain at their peak for an extended period. However, the impact of these rate increases on the Irish economy is a cause for concern, and the Central Bank is closely monitoring the situation.