Report: If the Inflation Outlook Does Not Improve, ECB Officials Ready to Raise Rates in September
According to media reports citing informed sources, if the eurozone inflation outlook does not show a significant improvement, European Central Bank officials are prepared to raise interest rates by 25 basis points in September. However, no decision has been made yet and adjustments will be made according to the evolving situation.
According to Bloomberg, citing sources familiar with the matter, if there is no significant improvement in the eurozone's inflation outlook, European Central Bank officials are prepared to raise interest rates in September.
Based on the current information and data, especially considering the Middle East conflict and its economic impact, the European Central Bank may need to raise rates by another 25 basis points to curb consumer price pressures.
However, the sources emphasized that no decisions have been made yet, and the situation could change rapidly, especially if progress is made toward a peace agreement or if the economy experiences a more severe downturn. This stance also aligns with the ECB's policy of “meeting-by-meeting assessment.”
On Thursday, ECB President Lagarde hinted at a possible rate hike in September. She stated that before finally deciding to keep the deposit rate unchanged at 2.25%, some members had discussed whether immediate action should be taken.
“Some governors asked themselves whether we should consider a rate hike,” Lagarde said on Thursday. “We believe the current policy stance is sufficient to support us waiting and closely monitoring developments and data in the coming weeks.”
Last month, the European Central Bank became the first major central bank in the G7 to raise rates since the outbreak of the conflict. Currently, in response to price pressures driven by geopolitical tensions, the ECB remains at the forefront among G7 central banks.
Lagarde told reporters: “The inflation outlook faces upside risks. Energy shocks could intensify further, and their impact on other goods prices and wages may be stronger than currently expected. The longer energy prices remain high, the greater the likelihood of broader inflation increases.”
At present, the Middle East conflict shows signs of escalation and may cause further supply disruptions. On Thursday, after Houthi forces backed by Iran claimed to have attacked two Saudi oil tankers, international oil prices broke through $100 per barrel for the first time in two months.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
Morgan Stanley’s $50.6M BTC buying shields market – But rally to $82K has THIS hurdle
Will the Fed "continue raising interest rates"? Will the "tightening cycle" of the late 1980s be repeated?
The Citi report points out that the current macro environment is highly similar to the tightening cycle of 1988-1989, when the economy remained resilient and inflation pressures gradually accumulated, followed by a slowdown in economic activity before policies shifted to easing. During that tightening cycle, the Federal Reserve raised interest rates 16 times in a row.
Rare alliance of arch-rivals! Musk and Altman support Dario Amodei's call to "slow down AI globally"
Anthropic's Amodei issued a call to "slow down AI globally," and to everyone's surprise, rivals Musk and Altman both publicly endorsed the initiative. The three industry giants unanimously agreed to grant third-party access to "employee-level" evaluation rights and to implement coordinated deceleration measures. Altman went further, announcing that OpenAI will not IPO this year. The resignation of a researcher and a collective breakout of uncontrollable AI systems have ignited long-standing industry fears.
Bitcoin vs Ethereum ETFs: Which asset is winning September’s flow battle?
Crypto prices
More
