ECB continues to struggle with its credibility issues – Rabobank – by MSalordFX ECB Banks
raised its key interest rates on Thursday by 50 basis points as expected and flagged another 50bp hike in March. Despite such decisions and Lagarde’s hawkish comments, European bond yields tumbled. Analysts at Rabobank point out the central bank continues to struggle with its image and credibility. They expect a 50bp hike in March, followed by two 25bp hikes in Q2 to a terminal rate of 3.50%.
“Despite the market not buying Lagarde’s message, we will bite. We have revised up our rate forecasts significantly to a 3.5% terminal rate. However, that is clearly a restrictive level that cannot be sustained by theInformation on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets.
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