Pierre Wunsch – Governor of the National Bank of Belgium – thinks the European Central Bank (ECB) should keep raising the interest rates to combat the bothersome inflation. The institution lifted the rates to 3.5% in March (the highest since the financial crash in 2008).

The Federal Reserve also has a similar strategy in the States, with interest rates currently standing at a range of 4.75% to 5%. 

While raising the benchmark aims at limiting the money supply and thus tackling the galloping inflation, it also increases borrowing costs, which could discourage some investors from dealing with certain assets, including cryptocurrencies. 

Adding up to 50 Basis Points in May?

Even though the annual inflation in the Euro area has been falling in the past few months, Wunsch believes the ECB should accelerate the reduction of its balance sheet to stimulate additional interest rate hikes:

“We need to do more on quantitative tightening. We could do a full stop of reinvestments this year, and even with that, it will take years to run down the portfolio.”

The Governor of Belgium’s central bank, who was among the first to alarm about the worrying inflation levels on the Old Continent, described a potential interest rate increase of another 75 basis points as “reasonable.” However, he expects the next hike to be a quarter or a half percent:

“I think May will be about 25 or 50 basis points. If there’s