ECB Raises as Fed Pauses
Posted on 06/16/2023
The U.S. Federal Reserve may have paused rate hikes, but the European Central Bank is not following suit. Rates in Europe are now at their highest in 22 years. Rates are still below the 5% in the U.S., at 3.25%. However, with Europe in economic contraction, the raise is material to the economy.
Like the Fed, who warns more hikes could be coming later, the ECB sounds determined and hawkish: “Future decisions will ensure that the key ECB interest rates will be brought to levels sufficiently restrictive to achieve a timely return of inflation to the 2% medium-term target and will be kept at those levels for as long as necessary.”
Inflation in Europe is 6.1%, the key reason rates are being hiked.
