ECB policymaker Panetta says ECB's goal is to keep inflation expectations firmly anchored, limiting second-round effects
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Inflation in Eurozone is currently hovering around 3% and is expected to remain above that level until early 2027 In considering future interest rate decisions, ECB's goal is to keep inflation expectations firmly anchored, limiting indirect and second-round effects of shocks Seve
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4 itemsECB hikes interest rates by 25bp
The ECB's recent interest rate hike of 25 basis points reflects a proactive approach to managing inflationary pressures exacerbated by geopolitical events, according to the latest analysis from **ING**. This marks the ECB's first increase since September 2023, adjusting the deposit rate to 2.25%. With inflation expected to trend towards 3.0% this year, the ECB appears committed to avoiding past mistakes of delayed action amidst rising prices; however, concerns over inflation's sustainability remain relevant. Market participants should note that this movement aligns with broader expectations of restrained economic growth projected at 0.8% in 2026. Per the full note, the ECB's approach is now informed by the lessons learned from its earlier inactions during the inflation surge of 2021-2022.
Luis de Guindos: Presentation of the ECB Annual Report 2025 to the Committee on Economic and Monetary Affairs of the European Parliament
The desk anticipates a sustained stability in the euro area, bolstered by the ECB's commitment to price stability and a gradual normalization of monetary policy. Per the full note [source], the ECB's recent decision to maintain the deposit facility rate at 2.0% reflects confidence in the ongoing disinflation process, with inflation averaging 2.1% in 2025. This outlook aligns with our consensus target of 1.075 for EUR/USD, as we see potential for the euro to strengthen against the dollar amid a resilient economic backdrop. However, upcoming inflation data on June 2 could serve as a catalyst for market movements.