Rate Hikes Will be “Gradual but Sustained” -Breaking
By Scott Kanowsky
Investing.com — The European Central Bank will pursue a “gradual but sustained” rise in interest rates until hitting somewhere between 1% and 2%, according to Governing Council member Francois Villeroy de Galhau.
Villeroy reiterated on French radio the ECB’s determination to control soaring inflation, but warned it was too ambitious and broad. Villeroy said that the central banks will work to lower inflation to below its target of 2%.
Villeroy made the comments on Thursday, stating that it would stop its huge bond-buying program and increase by 25 basis points for July. However, it did not give any details about the size of the September increase.
Meanwhile, Deutsche Bank (ETR:), has recalculated the baseline ECB rate increase expectations. It now forecasts a 50 basis-point rise in October and September, along with a 25 basis-point increase in December. This year, the lender previously predicted a 50-basis point increase.
At 0310 GMT (0710 GMT), the yield stood at 3.720% while it fell to 1.429%.