Underlying price pressures in the euro zone may prove more difficult to tame but monetary policy is showing signs of effectiveness and further rate hikes must be done step by step, Dutch central bank chief Klaas Knot said on Tuesday. The ECB has raised rates by a combined 375 basis points over the past year to combat runaway inflation, and at least another two more hikes are expected by investors, but the end of the fastest tightening cycle in the bank's quarter century history is nearing its end. "Because inflation was high for a long period, underlying inflationary pressures have built up," Knot said in a speech. ... (full story)