Joachim Nagel, President of the Bundesbank and member of the ECB Governing Council, talks about the central bank's latest interest rate decision ...
What Joachim Nagel said
Written from the verified transcript and checked against it. Every figure links to the moment it was said.
Joachim Nagel, President of the Deutsche Bundesbank, discussed the European Central Bank's (ECB) monetary policy stance and the economic outlook. He emphasized the Governing Council's commitment to bringing inflation back to the 2% target, describing the recent rate hike as placing policy at the upper bound of neutral territory. Nagel said it is too early to speculate on further hikes, noting that while energy prices are elevated, the situation is not comparable to 2022. He expressed cautiousness about gas storage levels and geopolitical risks. Nagel highlighted Germany's improved growth forecast, attributing 23% of growth to reforms. He declined to comment on the AfD's election win but expressed concern about its impact on investor perceptions. He also mentioned expecting productivity gains from AI, attributed higher bond risk premiums to energy prices, and stressed Europe should focus on its own reforms.
Key takeaways
Nagel attributes 23% of Germany's growth in the first half of the year to government reforms.
Nagel says the oil price is near 110 and the situation is not comparable to 2022, so it is too early to speculate on further hikes.
Nagel expects AI to bring productivity gains to European industry, but not through frontier models.
0:27Would you, if inflation and oil prices stay at that elevated level, also be in favor?
1:17But inflation risks have risen quite clearly and we also need to look at the gas price because it's super important for Europe heading into the winter season. So how concerned are you?
2:06Especially because gas prices are spiking already now and at least for Germany one can say that storage volumes are quite low. How do you monitor that?
2:47Let me bring you back to what the market is expecting, a terminal rate probably at 3%. Is that restrictive territory?
4:26Are we still a country where foreign investment is welcomed and foreigners are welcomed?
5:22Do you think the government is stable going forward?
6:09Are they enough to kickstart the German economy and also change the direction of travels when it comes to capital flows?
7:08So what can we do to actually be at the forefront as well when it comes to the new industries?
I think first of all it gives a clear signal that we, the Governing Council, we have this strong commitment to bring the inflation rate down back to our target of 2%. We are doing this in a very complicated environment. So we saw a lot of volatility over the course of the last months and what we did yesterday is a reflection of our forecast, what we see in our projections.
Overnight, many analysts have reacted to yesterday's press conference, yesterday's story that inflation will stay higher for longer and pricing in at least one or two more rate hikes. Would you, if inflation and oil prices stay at that elevated level, also be in favor?
Well, it's too early to speculate on this. I think what we see is that energy prices went up last week. Now we are close to 110 when I'm talking about the oil price. So it is not clear what the energy prices are doing over the next weeks and months. So I think it is dependent on the energy price development and I will do my assessment when we are coming together the next time.
But inflation risks have risen quite clearly and we also need to look at the gas price because it's super important for Europe heading into the winter season. So how concerned are you?
I guess the development what I see there is not comparable with the development we had after the Russian war against Ukraine in 2022. So now we are much better off. We have LNG terminals. But we are getting into the cold season. This is what comes and so the energy price development is something we have to look at. And I will not say that I'm concerned but we should be cautious in a way and reflect what's going on there. What does that mean for monetary policy? Yes, it is something we have to look at.
Especially because gas prices are spiking already now and at least for Germany one can say that storage volumes are quite low. How do you monitor that?
I think the storage volumes are lower compared to previous years but it's not in a way a concern to me. And I alluded to the 2022-2023 winter, that was a different time. I said that now we have more LNG options available if something is maybe going really into the wrong way. So I'm looking what the gas storage is doing but it's not in a way, this is not a real concern.
In my interpretation, so the rate hike yesterday, I think we are at the upper bound of the neutral territory. I will not exclude that we have to go in the mild restrictive territory but as I said it's very much dependent on how the energy prices evolve, how the price picture is evolving over the course of maybe the next months.
This is good news, yeah, this is good news. I think taking the German case, I think economic growth a couple of months ago we thought it's maybe roughly around 0.6. Now maybe we can end up for this year at around 1%. This is really good news. But I'm also here a little bit reluctant to give a clear indication because we know that we learned a lot from financial markets, global economy, geopolitical risks. So we have to wait what the next months, weeks will also bring in this regard.
Yeah. But it's not only true for the growth rate here in Germany. I guess it is also what I see for the whole world that we are driven by this geopolitical risk, what's going on in the Middle East. What does that mean again for the energy prices? So we are sitting here in one boat.
But political risk is also big times. We look into France with an unknown result for the upcoming election here in Germany. The AfD did win the first election for a federal state. What's the message to investors? Are we still a country where foreign investment is welcomed and foreigners are welcomed?
I will not comment on AfD or what this party is doing but what I see is and I'm being asked by people from outside what's going on here and this is I would say not good news from an investor perspective because I'm really concerned what does that mean for our democracy, for our shared values and it's a complicated message that is coming out of these election results.
Nagel, J. (2026, September 11). Nagel: ECB could move to a slightly restrictive interest rate level [Interview transcript]. CNBC International Live. CEOInterviews.AI. https://ceointerviews.ai/interview/1348214/
MLA
Joachim Nagel. "Nagel: ECB could move to a slightly restrictive interest rate level." CNBC International Live, 11 Sep. 2026. Transcript, CEOInterviews.AI, https://ceointerviews.ai/interview/1348214/.
BibTeX
@misc{nagel2026_1348214,
author = {Joachim Nagel},
title = {Nagel: ECB could move to a slightly restrictive interest rate level},
howpublished = {Interview transcript, CNBC International Live. CEOInterviews.AI},
year = {2026},
month = {sep},
url = {https://ceointerviews.ai/interview/1348214/},
note = {Speaker-attributed transcript with timestamps}
}
