According to Christine Lagarde, President of the European Central Bank (ECB), the maximum level that the key interest rates in the euro area have reached in the current cycle of increases must ensure that inflation returns to the target value of 2 percent in the medium term.
Interest rates have more room to rise, Lagarde said in an interview with Latvian website Delfi Bizness published on Tuesday.
"The goal is clear, and we haven't reached it yet." She did not name a figure for the maximum level that interest rates will ultimately reach.
Last week, the ECB hiked interest rates by a further 75 basis points.
The main refinancing rate is now 2 percent and the deposit rate is 1.5 percent.
Eurozone inflation hit a new record high of 10.7 percent in October, beating economists' estimates even as economic growth slowed.
For the winter, many economists expect an economic dip in view of the curtailed Russian energy supplies.
Lagarde acknowledged that the likelihood of a recession has increased.
But she warned of the dangers of not taking action to curb inflation.
US Federal Reserve discusses interest rate hikes
"Inflation is still consistently too high in the eurozone," she said.
“The longer inflation stays at these high levels, the greater the risk that it will spread throughout the economy.
Then consumers and businesses will also start expecting higher inflation going forward, and that's dangerous."
The Federal Reserve's two-day interest rate meeting begins this Tuesday.
The interest rate decision is due on Wednesday evening.
A fourth increase in US interest rates by 0.75 percentage points is already considered agreed among stockbrokers.
The focus is therefore primarily on comments from Fed Chair Jerome Powell on the interest rate outlook.
The US key interest rate (Fed Funds Rate) is currently in the range of 3.00 and 3.25 percent.