Slovak central bank Governor and European Central Bank (ECB) Governing Council member Peter Kazimir said on Monday that he expects a 25 bps rate hike in July and is open to discussing a 50 bps move, perhaps for September, amid record-high Eurozone inflation, reported Reuters. The neutral rate in the Eurozone is closer to 2.0% than 1.0%, he opined, meaning it will take around 200 bps of tightening to get interest rates back to neutral. 

Lifting interest rates back to neutral may not be enough to contain inflation, he warned, noting that inflation will stay over the bank's target in 2024 and possibly return in 2025. Moreover, Kazimir warned that a short recession in some Eurozone countries is possible this year, but a recession for the entire bloc is unlikely. Finally, Kazimir noted that inflation is broadening, but not yet de-anchoring.