Story thread · 5 reports / 4 sources

ECB Faces Near Certain Further Increase in Interest Rates but Markets Already Look Beyond It

bta.bg · 5dShare

The European Central Bank (ECB) is facing a decision today that has largely already been priced in by the markets: a new 25-basis-point increase in the deposit rate to 2.50%. The central bankers' meeting is being held outside the ECB's usual premises this time, at the headquarters of the German central bank, the Bundesbank, on the outskirts of Berlin. A significantly more important question for investors, however, is whether this will be the final step in the current tightening cycle or the beginning of a longer period of restrictive monetary policy. Expectations of another increase have strengthened in recent weeks after euro area inflation accelerated to 3.3% in August, reaching its highest level in three years. Energy is again the main driver of price pressures after the renewed escalation of the conflict between the US and Iran led to a surge in oil prices and reduced hopes for a quick normalization of supplies through the Strait of Hormuz. This puts the ECB in a difficult position

First report: European markets edge lower, ECB decision in focus — seekingalpha.com, 8d