In a committed effort to counteract inflation, the European Central Bank (ECB) is expected to raise the benchmark interest rate to 0% this yearas reported by Bloomberg citing the expectations of the money markets.
The central bank’s key rate is at -0.5% and has been negative since 2014.
Additional comments
“Money markets are now pricing two quarter-point hikes in 2022compared to a smaller increase earlier in the month, according to interest rate swaps.”
“The investors they had previously positioned themselves for two 25 basis point hikes in 2022 after the February ECB meetingonly for then lower those expectations amid concerns that war would be a further drag for growth.”
Aggressive expectations for ECB tightening reignited after the Fed hiked rates last week. Meanwhile, the ECB hinted at accelerating the taper in asset purchases at its March 10 monetary policy meeting.
Source: Fx Street
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