The 50 basis point rate hike may continue until May
Previously the ECB gave guidance for the March meeting only
Markets expect the ECB to raise rates by 25 or 50 points
In addition to the Federal Reserve (Fed), European Central Bank (ECB) policymakers also gave an insight into the future direction of their monetary policy.
Klaas Knot, who is also the governor of the Dutch central bank said that the ECB may go ahead with a big interest rate hike in May if core inflation does not fall.
The ECB raised interest rates by 50 basis points last week and signaled a similar increase next month
He is one of those who 'brave' to give an indication of the direction of the central bank, where previously President Christine Lagarde kept the option open for the next meeting in May.
This led the market to place expectations that the ECB would raise rates by 25 or 50 basis points.
Turning to Knot, he said the central bank should only reduce rate hikes when it sees core inflation (excluding energy and food prices) easing.
He added that if there is a clear and decisive change in inflation dynamics, Knot expects the central bank to move to smaller steps.
Knott expects headline inflation to peak and possibly fall faster than the ECB previously forecast.
