Francesco Fedele, CEO, BF.direkt AG:
“The ECB’s decision to leave key interest rates unchanged is understandable and correct. Despite the poor economic situation, there is still a risk that inflation will rise again. In the service sector, price increases continue to be very large due to the high wage agreements. U.S. customs policy also harbors risks that can have an inflationary effect overall. In particular, EU counter-tariffs on US imports could also cause price increases very quickly in Germany.
The ECB should continue to hold back on lowering key interest rates. If markets are not clearly convinced that the ECB is determined to fight inflation, capital market participants could demand higher interest rates on long-term loans. This would not only be bad news for the real estate industry. In this context, it should not be forgotten that the ECB is slowly but steadily reducing its own stock of government bonds and other loans. Even if the capital markets are currently able to absorb this well due to the ECB’s cautious approach, this tends to cause interest rates for long-term loans to rise.”
