Bundesbank president foresees several interest rate steps this year | Financial

“At our meeting in June, we must send a clear signal about where we are going,” Nagel told the German magazine Der Spiegel. “From my point of view, we should then take a first interest rate step in July and follow with further steps in the second half of the year.”

The financial markets are widely expected to raise interest rates by 0.25 percentage point in July. Another such step should follow in September, so that from that moment on it will no longer cost banks to store capital at the ECB.

ECB President Christine Lagarde unveiled a plan earlier this week to get rid of negative interest rates by the end of the third quarter. Inflation is expected to rise to nearly four times the ECB’s 2 percent target this month. Several policymakers would even like a 0.5 percentage point step on the deposit rate in July, which would immediately bring it down to zero.

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