ECB to Hike Rates By Another 50Bps
The European Central Bank will likely hold to its policy guidance and increase interest rates by another 50 bps to fresh 14-year highs on Thursday, but it might adopt a more dovish tone as policymakers try to reconcile the fight against inflation with the need to maintain financial stability. Markets have also priced a chance of a smaller 25 bps rate hike following the failure of Silicon Valley Bank in the US and the collapse in the share price of Credit Suisse this week. However, ECB policymakers asserted that there were no indications of a direct risk of contagion to European banks from turmoil in the US banking sector, while Swiss authorities have also stepped in to support the embattled Swiss bank.
