Still not taking its foot off the brake
The European Central Bank looks set to keep the pressure on Thursday with another expected rate hike. That’s the monetary-policy version of saying, “Sure, things look calmer... but I’m not relaxing just yet.”
What’s got policymakers twitchy? The bank is also expected to lift its inflation forecast from March, when it was assuming a swift end to the war in Iran. In other words, the ECB’s old playbook may have aged like milk, and it’s likely adjusting the numbers accordingly.
Why investors should care
Higher-for-longer rates don’t just make borrowers grumpy. They can also slow credit growth, pressure eurozone equities, and keep bond yields on edge. If the ECB sounds more hawkish than hoped, markets that were quietly dreaming of a pivot could get a reality check.
The big picture
The headline here isn’t just the hike itself — it’s the message behind it. The ECB seems determined to keep its guard up, even without dramatic signs of an inflation spiral. For markets, that usually means one thing: don’t get too comfortable too fast.