The ECB is virtually certain to hike rates Thursday. Here is why Wall Street is bracing for what comes next.
The ECB is virtually certain to hike rates Thursday. Here is why Wall Street is bracing for what comes next.
ECB strongly expected lift interest rates 25 bps to 2.5% at its policy meeting Thursday
Futures markets are pricing in a 99.7% probability that the European Central Bank will tighten monetary policy by 25 basis points to 2.5% when it meets Thursday. What’s less clear is whether its president, Christine Lagarde, will signal even more restrictive policy in the months to come or whether she will tack a more cautious, non-committal course. Much depends on the potential for resolution or escalation in the Strait of Hormuz.
ING’s economists told their clients in a note published Tuesday that while anticipating the 25bp move like almost everyone else, they think Lagarde will keep her options open and push back against the current bond market consensus that there will be another three quarter-point increases by June in 2027.
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