The European Central Bank is expected to end its bond-buying stimulus program at the beginning of the third quarter of this year, followed by an interest rate hike that could come just “a few weeks” later, the president of the European Central Bank said on Wednesday (11) BCE, Christine Lagarde.
Lagarde thus consolidates market expectations that the ECB will raise interest rates for the first time in more than a decade in July, in an attempt to tame record inflation in the euro zone – a result of rising energy prices that contaminate other goods.
Most other major central banks have already raised borrowing costs, but the ECB, which had struggled with very low inflation for a decade, is still pumping money into the financial system by buying bonds.
“My expectation is that they will be completed at the beginning of the third quarter,” Lagarde said at a conference in the Slovenian capital.
“The first rate hike, informed by the ECB’s forward rate guidance, will come sometime after the end of asset purchases. This could mean a period of just a few weeks.”
She joins a growing number of ECB officials calling for an increase in July after inflation hit 7.5% in the euro zone last month.
Source: CNN Brasil
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