European Central Bank 'Hawk King': Inflation stickiness is underestimated, premature action will bring greater risks

June 29th, Jinshi data, European Central Bank committee member Holtzman warned in an interview with Chilean media LT Pulso, saying, “The stickiness of inflation is underestimated.” Holtzman, who holds a hawkish position, was the only member of the European Central Bank to oppose the rate cut in June. Subsequently, Holtzman argued that the policy stance based on data must follow the signals of the upcoming economic data. Holtzman said in the interview, “There are two main possibilities for our actions and mistakes: acting too early or acting too late. The question is what risks are involved, and my feeling is that the risk of acting too early is greater than the risk of acting too late.” He said that a slow rate cut “may temporarily lead to a decline in the economic growth rate.” Conversely, “if the action is too fast and then leads to new inflation, you may have to raise interest rates again, which will generate more noise and negative impact on the system,” he added.