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#ecb
The ECB and BoE Are Unlikely to Rush With Rate Hikes
Europe's two largest central banks kept borrowing costs on hold at their April meetings, but the direction of the next move is no longer ambiguous. Rising energy prices and sticky services inflation are forcing Frankfurt and Threadneedle Street to confront a question neither wants to answer: how much growth are they willing to sacrifice to keep inflation expectations anchored?
The ECB held rates in April. A June hike now looks like the baseline.
Eurozone inflation jumped to 3.0 percent in April, driven by an Iran-conflict energy shock, and ECB policymakers are signaling the first rate hike since the easing cycle is coming in June.
ECB's Nagel: Two More Rate Hikes Are the Baseline
Bundesbank President Joachim Nagel said the ECB's baseline scenario now includes two additional rate increases this year as the Iran war fuels inflation, hardening the case for a June move.
Lagarde rejects euro stablecoins, warns $300bn market threatens ECB policy transmission
European Central Bank President Christine Lagarde rejected calls for the euro area to promote euro-denominated stablecoins, warning that the $300 billion market risks financial stability and would narrow the channel through which ECB rate decisions reach the real economy.
ECB heads into June split as Villeroy pushes back on Frankfurt hawks
Banque de France governor François Villeroy de Galhau told an audience in Paris that the next ECB move should track the data, not the calendar, in a public pushback at Bundesbank president Joachim Nagel and Austria's Martin Kocher, who had effectively lined the Council up for a 25 basis point hike on 5 June.
