Several bigger hikes possible if inflation worsens, ECB’s Knot says

“Subsequently, we have to see if that’s enough to bring back inflation to 2% in the medium-to-long term,” Knot said Friday in a radio interview

Knot, an ECB hawk who was the first Governing Council member to float the idea of a hike above the usual quarter-point, said that even by moving in larger increments he doesn’t expect rates to be raised by a cumulative 200 basis points before early 2023.

European Central Bank Governing Council member Klaas Knot said several half-point increases in interest rates could be needed if inflation worsens -- indicating a possible move of that size in September may not be a one-off.

Knot, an ECB hawk who was the first Governing Council member to float the idea of a hike above the usual quarter-point, said that even by moving in larger increments he doesn’t expect rates to be raised by a cumulative 200 basis points before early 2023.