Investing.com — Despite recent data suggesting that prices may have peaked in the eurozone, the European Central Bank has pushed back as policymakers remain focused on keeping inflation under control. It fell another 50 basis points on Thursday.
ECB President Christine Lagarde said the central bank would “keep its course” on the current monetary policy tightening cycle, adding that inflation was still “too high”.
This week’s economic data helped alleviate some of those concerns. Mild winters have moderated rising monthly energy costs.
The bloc’s economy has also proven generally resilient to pressures brought on by rising borrowing costs. The Eurozone in Q4 disappointed hopes that his aggressive ECB rate hike in 2022 will trigger a deep recession in the short term.
But quarter-on-quarter growth is only 0.1% in the final three months of 2022, and last month’s headline inflation of 8.5% is still well above the ECB’s announced target of 2%. . Meanwhile, due to technical problems with the German statistical office, his January for the German currency area did not include official preliminary data for the largest economy.
ECB members will have a chance to analyze further inflation figures before making their next policy decision in March, and officials want to know more about how much price growth has slowed.ECB in December Its own policy guidance predicted that another 50 basis point rate hike would “probably” be required at that meeting next month, but media reports suggest support for a smaller rate hike may be starting to gain momentum. It suggests that there is
Investors will hold a press conference on Thursday and are eagerly awaiting comments on the March meeting. She has previously claimed that decisions are made on a meeting-by-meeting basis.
Analysts expect the ECB to eventually raise interest rates to somewhere between 3.25% and 3.75%.
The move from the ECB comes after the Federal Reserve put the brakes on its unprecedented tightening policy on Wednesday, raising borrowing costs more modestly. But Fed Chairman Jerome Powell has warned that “continuous rate hikes” will be needed to keep inflation in check.