Further European rate hikes 'very much dependent' on energy costs, Bundesbank chief tells CNBC
Joachim Nagel told CNBC that a potential move in rates into restrictive territory was "very much dependent on how the energy prices evolve."
TL;DR
- European Central Bank (ECB) interest rate hikes are significantly dependent on energy price developments.
- Bundesbank chief Joachim Nagel indicated that rates are currently near neutral but could move into restrictive territory.
- The ECB recently raised its key interest rate by a quarter percentage point to 2.5%.
- Global oil prices remain elevated above $100 a barrel, and European gas prices are at their highest since 2022.
- Nagel is not overly concerned about European gas storage levels for the upcoming winter, citing increased options for Liquefied Natural Gas (LNG) procurement.