Faced with soaring prices in the wake of the Russian offensive in Ukraine, the ECB in July began an unprecedented cycle of rate hikes, halting nearly a decade of cheap money in order to dampen demand.
On Thursday, the European Central Bank did not allow itself to be frightened by the risk of a new banking crisis and decided in favor of another rate hike of half a percentage point in order to fight inflation, judging that the banks euro area were strong and “resilient”.
The guardians of the euro are however cautious about the continuation of monetary tightening and have given up on their commitment to raise interest rates further “significantly” in the months to come.
“It is not possible to determine at this stage what will be the path to follow” on rates, acknowledged ECB President Christine Lagarde, while the rout in the United States of Silicon Valley Bank (SVB) and Concerns around Credit Suisse have shaken the markets strongly for a week.