Size of September rate hike will depend on inflation forecast – Lagarde | Photo credits: European Central Bank
AMSTERDAM, June 9 (Reuters) – European Central Bank (ECB) President Christine Lagarde said on Thursday that the hike in key interest rates scheduled for September would be more than 25 basis points if the inflation forecast of the institution for 2024 is then equal to or greater than 2.1%.
“We must stay the course and be determined to contain inflation,” she told a news conference after the Governing Council’s monetary policy meeting in Amsterdam.
Markets expect the ECB, like the US Federal Reserve and other major central banks, to eventually opt for one or more 50 basis point rate hikes, as most hikes since the financial crisis were limited to 25 points.
The money markets are thus anticipating a rise of 75 points in total over the next two meetings of the Governing Council, which implies that at least one of the two will result in an increase of no more than 25 points.
The Austrian, Dutch, Latvian and Slovak governors have recently pleaded for the possibility of a 50-point hike to be debated this summer while their Italian and Spanish counterparts defend a more cautious approach. (Report Francesco Canepa, French version Marc Angrand)