Joachim Nagel, governor of the German central bank and member of the ECB, shares his latest thoughts on inflation and the possibility of interest rate hikes in the eurozone.
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Joachim Nagel, member of the Governing Council of the European Central Bank, said that while inflation will remain stubborn, the current path for interest rates remains clear.
Speaking to CNBC's Karen Tso at the annual meetings of the IMF and World Bank in Washington, the president of the Deutsche Bundesbank said: “I don't see any reason to change anything if there isn't something new coming, and I don't see where that could come from.”
In an exclusive interview, Nagel said global tariff tensions had created a “lose-lose situation” for everyone, but he cited the recent strength of the German economy as fueling optimism in Europe.
German economic institutes recently revised their growth prospects for 2025, with Goldman Sachs forecasting that the economy will continue to grow by 1.4% in 2026 and 1.8% in 2027.
Nagel cited private credit as a concern and said the size of the market and “spillover effects from less regulated market participants” are something regulators should keep a close eye on.
In a separate exclusive interview, ECB Governing Council member François Villeroy de Galhau said he recommended “flexible pragmatism” when it comes to the path forward for interest rates, adding: “We are in a good position… but a good position is not a fixed position.”
Deviating from the views of his ECB colleague Nagel, the French central bank chief suggested that the next interest rate increase would be a rate cut rather than an interest rate increase.
This comes as he welcomed some political clarity in France as newly reinstated Prime Minister Sébastien Lecornu suspended the controversial pension plan at the heart of France's political deadlock. Villeroy said lawmakers must now address budget uncertainty.
Investors have responded positively to this week's political developments.
