* 02-Feb-2023 15:59:52 – ECB POLICYMAKERS SEE AT LEAST TWO MORE RATE HIKES -SOURCES

* 02-Feb-2023 15:59:52 – ECB POLICYMAKERS SEE INCREASE OF 25 BPS OR 50 BPS IN MAY -SOURCES

* 02-Feb-2023 15:59:53 – SOME ECB POLICYMAKERS SEE 3.5% AS TERMINAL RATE -SOURCES

 

 

ECB governors see at least two more rate hikes, sources say – Reuters

 

02-Feb-2023 16:00:31ECB-POLICY/SOURCES

 

       FRANKFURT, Feb 2 (Reuters) – European Central Bank

policymakers left Thursday’s meeting expecting at least two more

rate hikes, although differences remained about their pace and

final destination, two members of the ECB’s rate-setting

Governing Council told Reuters.

    The ECB raised its main interest rate by 0.5%, to 2.5%, on

Thursday and explicitly signalled at least one more hike of the

same magnitude next month, reaffirming that it would stay the

course in the fight against high inflation.

    Two policymakers who talked to Reuters after the meeting

said it was clear that rates would then be increased again at

the ECB’s following meeting in May, although the Governing

Council had not discussed the size of that raise on Thursday.

    Based on current data, they said, some policymakers were

anticipating a possibly final 25-basis-point increase at the

ECB’s May 4 meeting, while others felt the streak of

50-basis-point hikes should continue, taking the deposit rate to

3.5%.

    That was seen a possible terminal rate by some policymakers

while others envisaged rate increases continuing through the

summer to even higher levels.

    The sources said Thursday’s decision was easily reached,

with only a small minority of policymakers feeling it was too

early to commit to a March rate hike worth 50 basis points.

    An ECB spokesperson declined to comment.

    At a news conference after Thursday’s decision, ECB

President Christine Lagarde said the central bank had “ground to

cover” in raising rates and that disinflation hadn’t started yet

in the euro zone.

 

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