MADRID: Any interest rate hike by the US Federal Reserve next month would not have any significant direct impact on Europe, European Central Bank (ECB) Vice President Vitor Constancio said on Wednesday (Thursday in Manila).
“We think there will not be any significant direct impact. Europe will be of course indirectly affected in economic terms, trade terms, by the possible effects on emerging markets,” he said in Madrid following a meeting of eurozone and Latin American central bankers.
The Fed has hinted at a rate hike in December, the first in more than nine years, a move it has repeatedly put off as US and global economic growth has remained tepid, but which is now widely expected.
The prospect of the key federal funds rate being lifted from near zero, where it has sat since the end of 2008, has roiled markets as it would mean higher borrowing costs for many governments and businesses around the world.
Eurozone inflation was zero in October, and the ECB is under pressure to do more to stimulate growth, but Constancio said there was no decision on any steps to be taken at the bank’s next monetary policy meeting in December.