Debate within the ECB on the magnitude of the rate hike – minutes | Photo credits: ECB / CC BY-NC-ND 2.0
FRANKFURT, July 7 (Reuters) – Members of the Governing Council of the European Central Bank (ECB) debated whether to raise interest rates more significantly in July and expressed support for maintaining the possibility of larger increases in future meetings to fight inflation, shows the minutes of their June 9 monetary policy meeting published on Thursday.
Fearing an anchoring of inflation, the ECB decided during this meeting to end its policy of bond purchases carried out under the Asset Purchase Program (APP) at the end of June and to raise its interest rates. interest of 25 basis points in July, specifying not to rule out a larger increase in September if the surge in prices does not slow down.
But part of his message was blurred by the emergency meeting convened less than a week later to decide on a new instrument to prevent a widening of yield spreads between eurozone member states.
“A number of members expressed an initial preference to keep the door open for a bigger hike at the July meeting,” reads the “minutes.”
“It was necessary to avoid that the gradual nature was perceived as excluding interest rate hikes of more than 25 basis points,” writes the ECB. “There was agreement that this gradualism shouldn’t necessarily be interpreted as a slow, small-step decision.”
Minutes of the emergency meeting will not be published, the ECB said.
Investors at this stage are forecasting a total hike of 135 basis points in ECB rates by the end of the year, 30 points less than in recent weeks due to the risk of recession. (Report Balazs Koranyi, French version Laetitia Volga and Claude Chendjou, edited by Bertrand Boucey)