ECB Set to Hike Rates Next Week, with Rising Chances of Further Tightening

Dow Jones
2小时前

1232 GMT - ECB's interest-rate outlook is becoming harder to call, Andrew Kenningham at Capital Economics says in a note. A hike next week appears all but certain, and a jump in gas prices and strong economic activity mean further tightening can't be ruled out, he says. "However, other indicators suggest that the case for rate hikes is far from clear-cut," he says, citing limited second-round effects from higher energy costs. While markets are pricing in three more hikes in total, Capital Economics doesn't expect any more after next week. Regardless, the ECB will likely reverse course within a year or so, Kenningham says. "We think the eurozone is more likely to run the risk of under-shooting than over-shooting its inflation target in the medium term."

 

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