The European Central Bank ended an unprecedented streak of 10 consecutive interest rate hikes and paused on policy moves at its meeting last Thursday.
It had lifted rates by a combined 4.5 percentage points since July 2022 to combat runaway price growth but promised a pause last month as record-high borrowing costs are starting to work their way through.
Kazimir said a “large chunk” of the ECB’s past decisions still had to pass on to the real economy.
“All those voices coining this as the end of the cycle should hold their horses,” Kazimir said in an opinion piece.
“It’s too soon to declare victory and say the job’s done.”
Kazimir said he would wait for the December update of the ECB’s inflation forecast to get a confirmation that the inflation decline is sustained.
“December forecasts are one of two key milestones needed to pass. March is the latter.
“Only then will we be able to say the tightening cycle is completed and move on to the subsequent – monitoring – phase,” Kazimir said.
“We will have to stay at the peak for the next few quarters. Bets on rate cuts happening already in the first half of next year are entirely misplaced.”
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