"The ECB must ensure that core inflation does not become entrenched," Wieland warned. To do this, he said, it must raise interest rates further so that the real interest rate, i.e., nominal interest minus inflation expectations, moves into positive territory. At the moment, this is still clearly negative, Wieland said.According to Wieland, it makes no sense to commit now to what interest rate level will be sufficient. "The ECB has to steadily raise interest rates until inflation comes down sustainably." Unexpected inflation erases purchasing power, he warned.The ECB decided on December 15 to raise interest rates for the fourth consecutive time. The key interest rate in the euro area thus rose to 2.5 percent.
