Robert Holzmann is Governor of Austria’s central financial institution and a European Central Financial institution Governing Council member, billed by many pundits because the A1 hawk on the desk.
Holzmann spoke in a radio interview on Saturday with public broadcaster ORF (Österreichischer Rundfunk, ‘Austrian Broadcasting’). He stated additional European Central Financial institution price cuts within the abscence of cuts from the US Federal Reserve would have an effect (decrease) on the EUR trade price and imply greater inflation:
“If the unique assumption of three price cuts have been to materialize, and the Federal Reserve didn’t reply, it might definitely have an effect on the trade price, and with it inflation”
On Thursday final week the ECB cut deposit rate to 3.75%, from 4%. Holzmann dissented from the speed reduce:
Holzmann blamed feedback from members of the Governing Council forward of the assembly that he felt left the Financial institution with no possibility however the reduce:
- “The council’s opinion was that there was no different manner, additionally as a result of it had been introduced that such a call could be made in June.”
Huh. I do not suppose its going out on a limb an excessive amount of to counsel that officers on the ECB are hosing down future price reduce expectations so as to restrict the danger of a sell-off within the euro. Holzmann is getting the ball rolling on this.
