On August 13, according to foreign media reports, 83% of economists expect the European Central Bank to raise the deposit facility rate by 25 basis points to 2.50% in September; 80% expect the deposit facility rate to remain at 2.50% by the end of the year; and 63% expect the deposit facility rate to remain at least 2.50% through the third quarter of 2027. Among the 69 economists surveyed, 57 (about 83%) expect an interest-rate hike next month. This proportion is higher than the 72% before the July meeting and the 65% in June. This indicates that, after the June rate hike, consensus in the market that the ECB will hike again in September is strengthening.
Nomura Securities said: “The longer oil prices stay at the current level and the higher they rise, the greater the risk of second-round effects. The ECB cannot act until it sees these effects, but they can act in advance—which is exactly what the ECB has been doing. The risk is that if the ECB only hikes once, it will look like a fine-tuning exercise, and as is well known, monetary policy cannot be conducted this way. If they hike once, they will very likely hike again. Given that the June rate hike is an obvious choice for the ECB, we believe the likelihood of another rate hike is very high.”
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