Deutsche Bank Chief Economist Tells Trichet To Keep Tightening Or Else

Trichet

Deutsche Bank chief economist Thomas Mayer has called on the ECB to hike rates again in an editorial in the Financial Times.

Mayer, not satiated by yesterday’s 0.25% hike, says the bank needs to stay ahead of the curve and not allow high inflation to take hold before it acts.

He argues continued low interest rates could trigger asset bubbles, like those that drove the financial crisis. By waiting too long to hike, the ECB could actually pop these bubbles and create more destruction that they would by getting ahead of the problem.

He also noted the euro can only become more stable if governments “ensure sound fiscal policies and flexible economies. So far many have failed to live up to their responsibility.”

Read his full editorial at the Financial Times >

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