According to Isabel Schnabel, a Member of the European Central Bank (ECB), interest rates should be raised to restrictive levels.

Messages from the European Central Bank (ECB) officials regarding a tight stance in monetary policy continue to come.

According to Isabel Schnabel, a Member of the Board of the European Central Bank, interest rates should be raised to “restrictive zones” to bring inflation down to target levels.

In an interview with the Frankfurter Allgemeine Zeitung newspaper published at the weekend, Schnabel pointed out that the risk of the ECB being too aggressive in interest rate hikes is still limited and that real interest rates are still very low.

Schnabel stated that they have not yet been able to say the net interest level for the restrictive zone and that this rate means above the neutral interest rate. ECB members had recently signaled a higher final interest rate than market expectations.

Schnabel acknowledged that it would be difficult for the ECB, which has increased interest rates in the last four meetings, to reach a consensus among members on the next steps. According to ECB projections, inflation will be well above the 2% target until 2025.