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Daniel Lacalle, chief economist and investment manager at Tressis Gestion, warns that the European Central Bank (ECB) is increasing rates during a period of stagnation in the euro area. Lacalle criticizes the ECB for hiking on imported energy inflation with no sign of demand overheating, while continuing to expand the sovereign-debt bubble and encourage fiscal irresponsibility.
He argues that these actions sustain moral hazard and risk further impacts on businesses and families across the euro area.
Lacalle previously noted that estimates for rate hikes were dropping as inflation pressures eased in financial markets. He has also observed that U.S. WTI oil prices fell below $69 per barrel following a decline in geopolitical risks and a normalization of supply. These observations come as the ECB faces scrutiny for its current monetary policy stance.