ECB to Keep Door Open to More Rate Hikes

Dow Jones
Yesterday

1129 GMT - With a European Central Bank rate hike at this Thursday's meeting no longer in doubt, the central question is whether policymakers have both the willingness and the justification to tighten monetary policy even further, ABN AMRO's Christophe Boucher says. For now, more interest-rate hikes would remain pre-emptive, given the eurozone has yet to display clear evidence of significant second-round inflation effects, he says. "At the same time, higher long-term yields have effectively tightened financial conditions since the last ECB meeting." Nevertheless, the ECB will likely keep the door open for more potential tightening while avoiding excessive precision that could be interpreted as forward guidance, Boucher says. "Data dependency will remain the key message."

 

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