Bank of Portugal (BdP) governor Mário Centeno said on Thursday that the European Central Bank is much closer to neutral interest rates.
During an intervention at the event Portugal Capital Markets Forum 2022in Lisbon, Mário Centeno believed that the European Central Bank (ECB) has raised interest rates to levels closer to those that do not stimulate or constrain the economy.
The head of the banking regulator pointed out that monetary policy will become simpler and more predictable after that, and also argues that the main risk of a recession is the war, not the rate hikes.
For the governor of the BdP, a severe recession can still be avoided, but it is important not to lose price expectations.
“We need to act not to anchor medium-term inflation expectations,” Centeno said.
Source: DN
