Joachim Nagel, President of the Deutsche Bundesbank, said on Monday that German inflation maintains its excessively high status and that the European Central Bank (ECB) will not attain its 2% target till 2025.
Nagel further highlighted that the ECB has stopped buying government bonds and is cautiously reducing its securities holdings by €15 billion per month.
Given the ECB’s present bond portfolio of about €5 trillion, Nagel clamored for an acceleration of quantitative tightening, which he believes the markets can handle.
Nagel insists that a swift reduction of the Euro system’s balance sheet is necessary from a monetary policy perspective.