ECB sources report: Policymakers see July pause if energy prices stay where they are
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Need to see material surge in crude prices to bring back July hike Projections embed two more rate hikesm meaning a Sept hike is still possible The ECB likes the look of brent down to $92 from a high of $125 but it's being held down artificially by strategic reserve releases and
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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.
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