ECB’s hawkish shift paves ground for a possible rate hike in the eurozone
The February ECB meeting marked the beginning of a clear hawkish shift in the ECB’s policy outlook. Although the policy stance was left unchanged, the tone of president Lagarde’s press conference showed a heightened level of concern with risks to the inflation outlook now seen as titled to the upside.
What you will learn:
- Odds of a rate hike in 2022 have clearly risen against this backdrop but one hike (or several as priced by markets) is still not our base case.
- Lagarde remained committed to sequencing (exiting QE before a possible rate hike), so QE would have to end in Q3 for a rate hike in December. The associated tightening in financial conditions in a still stressed environment may be too much.
- It appears likely that March’s updated inflation forecasts will show a fairly steep energy-related deceleration in inflation in early-2023.
Tags:
Related research
Post
What’s behind our cautious medium-term outlook on Thailand
Thailand economy will likely see a rebound over the remainder of the year, but over the medium term we think the growth path will be modest. What's underneath is the long-standing issue of Thailand's ageing population and consequential decline in its labour force.
Find Out More
Post
Most US metros to see slower growth in 2024
Most metros have had steady GDP and job growth in 2023 but will start to see quarterly declines in Q4 or Q1 2024. All of the top 50 metros are forecast to see a slowdown in GDP growth in 2024, driven by lower finance and real estate GDP more than by other sectors.
Find Out More
Post
Why the real yield on private wealth will keep falling globally
Despite the importance of returns on private wealth for long-term investors – be they households, asset managers, or pension funds – the fact that real yields have been on a downward trend across the world for decades seems to have escaped attention.
Find Out More