Rates Raised Another 50 Points Despite the Recent Market Turmoil

The tensions that have recently emerged in the financial system add a lot of uncertainty and could have prompted the ECB to be more cautious. Lastly, the still-too-high inflation justified further monetary tightening.

If financial tensions ease, the ECB is likely to continue monetary tightening, but if the situation worsens, it may want to take a more cautious approach. For now, we expect two more 25-basis-point increases by the summer.