ECB announce interest rate. The European Central Bank or ECB is expected to raise interest rates at a policy meeting that will take place on Thursday (15/6/2023). Economists widely expect the benchmark deposit rate to rise 25 basis points to 3.5 percent. This has economists focused on clues as to how far the ECB will raise interest rates, given that inflation is still three times its 2 percent target.
Then, the majority of analysts and investors agree that interest rates will still be raised one more time at the meeting in July or September. Many ECB officials also support this.
A rate hike at both meetings also cannot be ruled out, especially if the latest quarterly economic projections show inflation to hold on even longer. Economists believe the ECB will raise interest rates sufficiently to tackle inflation. However, the increase was modest given the current state of the eurozone economy.
ECB announce interest rate. Economists predict the rise in the deposit rate peaked at 3.75 percent in July and will remain there for nearly a year.
Then, last month’s inflation was reported to be lower than expected. Core inflation also hit a four-month low of 5.3 percent. On the other hand, credit standards have also become tighter and demand for loans has decreased.
The later updated projections will also highlight how policy transmission will affect economic growth and inflation through 2025. Later, plans to halt reinvestment under quantitative easing (QE) in July 2023 will be officially confirmed, with around 28 billion euros of debt of even maturity. – average every month in the next year.
If the ECB raises interest rates again, this decision will be inconsistent with the US central bank or the Federal Reserve (The Fed) maintaining its benchmark interest rate.
ECB announce interest rate. Previously, it held its benchmark interest rate at 5-5.25 percent, but hinted at a further increase this year to reduce inflation.
The Fed’s quarterly interest rate projection, or dot plot, shows the median interest rate rising to 5.6 percent at the end of the year, up from 5.1 percent in the previous quarterly projection.