Nouriel Roubini has blasted the European Central Bank’s recent rate hike, citing the weakness of the eurozone’s fringe, according to the BBC.
He argues that the strength of the euro is threatening the ability of countries like Greece, Portugal, Ireland, and Spain to recover. “Maybe the ECB is tightening to much, too fast, too soon,” he says.
Many of the eurozone’s weakest are still struggling, according to Roubini. “The trouble is that in the periphery of the eurozone there is still a recession, they have never got out of recession,” he says.
Roubini says that this isn’t just about creating a weak euro. The ECB’s tightening strategy is increasing borrowing costs across the eurozone, damaging the recovery. He also says this tightening program isn’t actually bringing down inflation within the currency region.
This is likely part of the reason why the ECB did not signal a further rate hike for the month of June and, instead, will likely wait until at least July to hike rates again.