BofA Securities now expects the European Central Bank (ECB) to raise interest rates by 1.50 percentage points this year, including 50-point moves in July and September, the bank said in a note on Monday. 6).
The bank, which previously expected 1.0 percentage points to rise this year, said last week that the euro zone’s inflation reading, which 1.0 percentage points is the minimum the bank will deliver.
“Our forecast was already more hawkish (inclined to reduce stimuli) than the consensus, and it is even more so now. We continue to worry that this is too much and too fast,” the analysts said in the note.
In a separate note, Barclays said on Monday that it now expects the ECB to raise interest rates by 0.25 point at each meeting from July to December.
He expects a further hike after that in the first quarter of next year, which would lift the ECB’s deposit rate to 0.75%.
The ECB last raised interest rates in 2011 and its deposit rate is currently at -0.50%.
Money markets are currently pricing in more than 1.30 point increases through the end of the year, with a move of 0.50 point in a single meeting through October.
Source: CNN Brasil
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