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ECB’s de Guindos says asset purchases must end before raising rates -Breaking

by Mike Robinson

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© Reuters. FILE PHOTO. Luis de Guindos (Vice-President) of the European Central Bank, gives a speech during day two of the Informal Meeting EU Ministers for Economics & Financial Affairs in Berlin Germany on September 12, 2020. Odd Andersen/Pool

MADRID, (Reuters) – Luis de Guindos, Vice President of the European Central Bank said Wednesday that before interest rates rise, it will have to stop buying assets.

De Guindos stated that they will examine the macroeconomic data and the projections. Then, we will adjust asset purchases as necessary and determine when an interest rate increase can occur.

Robert Holzmann from the European Central Bank stated that the ECB may increase interest rates without ending the bond purchase program. He challenged the bank’s long-held views on how to proceed with its policy changes.

The ECB has reaffirmed its pledge to not raise interest rates in 2018, despite inflation reaching new record levels. However, it continues to maintain that the end of bond purchases is always the first priority, ahead of any increase.

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