• May 29, 2023

Visco: “Increase in rates to prevent the genius of inflation from slipping out of hand”

MILAN – “We do raise interest rates”, like the ECB, “to prevent the genius of inflation from slipping out of hand, that there are expectations of inflation that grow in an uncontrolled way and in the end there is a run-up between prices and wages which only leads to a fall in real incomes “. The Governor of the Bank of Italy said so Ignazio Visco the Young Factor initiative underway in Milan, following the emergency meeting with which the board announced new measures to contain the increase in spreads. “Lately we have had a very strong and different price increase between Europe and the United States, explains Visco, recalling that” the Fed to contain a very strong price increase, stimulated by excess demand, is making monetary policy at this point. restrictive “. While” the ECB, faced with an increase in prices that is mainly due to an increase in the cost of energy “notes the Governor, must intervene to prevent these costs from being transferred, eroding the purchasing power of families.

The governor then expressed concern about energy prices: “We thought they could go down in 1-2 years they will remain high and maybe they will increase”. “Inflation – continued Visco – leads to a decrease in real incomes and there is also uncertainty, companies wait and do not invest so overall demand falls”.

ECB, how the Frankfurt anti-spread shield will work

by Vittoria Puledda

De Guindos: “The markets should have no doubts about our determination”

The ECB vice president Luis De Guindos also spoke about the initiative put in place by the ECB: “The markets should have no doubts about how determined we are to tackle fragmentation”. This is the commitment assured by the vice president of the ECB, Luis de Guindos, in an interview with the Greek daily Ta Nea. “The fragmentation, or reduced transmission of monetary policy, has always been a concern for the Governing Council. Pepp was launched – underlines de Guindos – taking into account flexibility, and this also applies to the reinvestment phase of Pepp. Yesterday we also decided to instruct the relevant Eurosystem committees, together with the ECB services, to accelerate the completion of the elaboration of a new anti-fragmentation instrument under review by the Governing Council “. And, says de Guindos, of this determination “the markets must have no doubts”.

Spread, the ECB draws its shield, the Fed accelerates the squeeze: + 0.75%

by our correspondents Tonia Mastrobuoni, Paolo Mastrolilli

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