ECB raises interest rates by 50 basis points. Today our ECB Special

There v. Chr is ready to raise Interest charges in today’s meeting. European Central Bank Governing Council members will focus on underlying inflation and try to predict when consumer prices, which are skyrocketing, might fall.

Inflation in the euro area has fallen in recent months due to falling energy prices. But core inflation, which excludes components like energy and food, continues to rise steadily.

“As the economy shows more resilience to the energy shock and the labor market remains tight, we think it will take much longer for price pressures in the service sector to ease significantly,” said Paul Hollingsworth, chief economist for Europe at BNP Paribas. in a research note recently reported by CNBC.

“Gas supplies are rising and gas prices are falling. Inflation has fallen and uncertainty is declining. That’s why we removed the recession from our 2023 forecast,” he said Markus Wand, ECB observer at german bank, in a recent customer communication.

Wall’s baseline assumes the ECB will hike rates by 50 basis points this week, 50 basis points in March and 25 basis points in Mayto arrive at a final rate of 3.25%. wall says:

“We expect rates to remain flat until mid-2024 when the ECB starts cutting 25 basis points per quarter until rates return to neutral in 2025.”

Analysts’ expectations of the ECB’s actions

What do analysts think of the upcoming ECB summit? Away Morgan Delledonne, Head of Investment Strategy Europe Global X, “If the ECB meeting is expected to match expectations of a 50 basis point hike, a strong hawkish positioning from President Lagarde could surprise the market.” Delledonne believes “the ECB’s tightening cycle will end after the Fed’s, as underlying inflationary pressures in the eurozone are only just beginning to take hold and the ECB needs to continue working to bring inflation back on target. Euro area interest rates could rise another 150 basis points by mid-year before reaching the peak of this tightening cycle.

He also expects rates to rise 50 basis points to 2.5% at next Thursday’s ECB Governing Council meeting Annalisa PiazzaFixed Income Research Analyst at MFS investment management, according to which “the pace of rate hikes should not slow down in the short term and a further 50 basis point hike is likely to be decided in March as the ECB clearly commits to bringing inflation down from the current high levels”. square says:

“We expect the ECB to reiterate its tightening approach in February as there are still uncertainties about underlying inflationary pressures and a change in approach would undermine the ECB’s credibility and inflation would lose its anchor entirely.”

Second Martin van Vliet, Global Macro Team Strategist at Robeco, The main scenario is that the ECB will raise the deposit rate by at least another 100 basis points in the next three meetings. But emphasizes:

“However, we fear that a worse than expected economic and market environment will prevent the ECB from going well beyond 3%. Furthermore, we are skeptical about market expectations that the interest rate on deposits will remain (significantly) above 2.5% in the coming years as we do not believe that all Eurozone economies are structurally capable of dealing with this to cope with the tighter financing conditions associated with the interest rate environment.

Finally Philip Diodovich, senior market strategist IG Italy forecasts forecasts for a more hawkish ECB than the Federal Reserve ahead of upcoming central bank meetings:

“We believe the ECB can hike interest rates again by 50 basis points, bringing the deposit rate to 2.50% and the main refinancing rate to 3%. In our opinion, communication will also be strengthened by emphasizing the European Central Bank’s obligation to continue raising interest rates in the coming months. After the central bank meetings, we expect the EUR/USD currency pair to be able to appreciate further, with possible targets even above 1.10”.

Our special ECB

Today from 14.10 We will live with “ECB Special” to comment on the monetary policy decision of the Frankfurt institute and the reaction of the markets. and give it 2:45 p.m We will always follow the press conference live Christine Lagarde, which we translate simultaneously into Italian. leads Alexandra Georgieva.