VIENNA (Reuters – The European Central Bank may raise rates in January. Announcing an end for bond purchases will send a clear signal that the European Central Bank is planning to move within the next two quarters. Robert Holzmann, a member on the Governing Council, said Wednesday.

Last week the ECB made another move to reduce crisis-era stimulus. The ECB announced it would suspend emergency bond purchases for March, but temporarily double its Asset Purchase Programme (APP), which will allow the transition.

Holzmann said that he was able to reduce or suspend APP purchases which are not yet completed. “This is a price signal that the markets will see because it has been established that the interest rate can only be raised after suspension of or cessation” Holzmann spoke at a press conference.

In extreme cases, it might be possible to suspend purchases this year in a data driven manner. The interest rate increase would take place either at the end or beginning of next year. This is roughly the time that the United States has experienced its third increase in interest rates.

Holzmann stated that we are always slightly earlier, and apparently used “this” to refer 2022.

Holzmann serves as the Governor of Austria’s Central Bank.

Although the majority of policymakers supported Thursday’s ECB measures, some conservative central banks chiefs from Germany and Austria – often opponents to the ECB’s easy-money policies – objected.

The ECB increased its inflation projections and sees inflation rising to 3.2% next year. This is well ahead of target. In 2023, the target was 1.8%. These projections were questioned by several policymakers who argued that the bank underestimates the possibility of price rise exceeding the 2% target.

Holzmann explained that “normally, if you say that we don’t need additional (bond) purchase because our inflation expectations are close to or above 2 percent in 2023/24, that would certainly be a strong signal for the increase of the interest rate in the subsequent or following two quarters.”