bullish
ECB: Delivering the Required Hikes
483 Views17 Mar 2023 00:45
SUMMARY
- The ECB delivered another 50bps rate hike, as promised in February and expected. It is not allowing Silicon Valley Bank’s broadly irrelevant failure to break its focus.
- Higher core inflation forecasts extend the problem and necessitate a tight monetary setting to break excessive pressures. ECB policy will rightly be data-dependent.
- We forecast 25bp deposit rate hikes in May and June, with risks skewed towards further steps if resilience outlives the current financial stability issues.
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