ECB policymaker Demarco says that the ECB will probably need to hike in June
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The ECB will probably need to hike in June The ECB must show commitment to 2% target to stay credible Medium-term inflation expectations remain well anchored There's not much evidence of indirect inflation effects ECB’s meeting-by-meeting approach is still valid Currently I don’t
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The ECB is poised for a rate hike in June, driven by external pressures from the Middle East energy crisis, which has shifted the focus from domestic inflation to imported costs. Per the full note [source], analysts now expect two 25 basis point hikes, bringing the policy rate to a neutral range of 1.75% to 2.5%. This marks a significant shift in market sentiment, as the ECB grapples with the dual challenge of managing inflation expectations while safeguarding economic growth. With the geopolitical landscape evolving, the market is closely watching for any signs of further escalation that could impact European energy supplies.