Since the ECB continues reinvesting the profits from the sale of securities it had bought within the framework of its bond-buying program, the national banks of the eurosystem will also continue buying massively at the bond markets, Wieland said. Currently, the ECB Governing Council expects to leave interest rates unchanged through the summer of 2019. In Wieland's opinion, the ECB loosened the interest rate screw even further "prognostically". He criticized that monetary policy remained in crisis mode although the economic performance had been growing faster than the potential for the last five years.
Although Wieland does not expect a quick increase in interest rates, he advises not only investors and borrowers to get ready. "The best way to provide for a rise in interest rates would be to reduce the debt ratio." Furthermore, he called upon the German government to strengthen the performance of the economy in a sustainable way. Therefore, he recommended reducing the tax charge for key players, such as income tax and corporate taxes.
Volker Wieland: "Zinsen rauf, Steuern runter" (Consorsbank-Magazin)