The financial markets are aligning with the ECB’s signals, expecting high interest rates to continue. This is in line with the ECB’s commitment to prevent any unwarranted easing in financial conditions. In a unanimous decision, the ECB’s council has resolved to maintain restrictive policy rates until inflation objectives are achieved.
Current monetary policy suggests that the period of aggressive rate hikes may be coming to an end, transitioning instead to a sustained phase of elevated rates. While not explicitly ruled out, further rate increases appear less likely given the economic challenges and signs of disinflation. These developments imply that the ECB might consider rate reductions sooner than previously anticipated.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
Source: Economy - investing.com
