European Central Bank council member Nicholas Garganas said economic growth and inflation may prove even stronger than forecast by the bank and suggested he sees scope to keep raising interest rates.
Garganas is the fourth ECB policy maker in the past week to signal the bank may keep raising rates into 2007 to tame inflation in the 12 euro nations. President Jean-Claude Trichet has already indicated an increase is likely next month and council member Axel Weber said Sept. 5 the ECB hasn't decided to stop tightening monetary policy at the end of the year.
The yields on interest-rate futures rose on Garganas' comments as investors fully priced in an increase in the key ECB rate to 3.75 percent in the first half of next year from 3 percent today. Last week, investors still expected the ECB to stop after taking the benchmark rate to 3.5 percent in December.
European Central Bank council member Nicholas Garganas said economic growth and inflation may prove even stronger than forecast by the bank and suggested he sees scope to keep raising interest rate ...