Markets are of the view that we have seen the final ECB rate hike, following last Thursday’s 25bps increase, which brought the key deposit rate up to 4%. The ECB commented that the marked tightening of monetary policy since July 2022 will have a substantial impact in terms of bringing inflation back down to its 2% target in a timely manner. It warned, though, that rates will need to be maintained at current levels for a sufficiently long period of time to ensure their inflation goal is met, suggesting that monetary easing is not on the horizon anytime soon.
