ECB keeps rates on hold, leaves room for more hikes

The ECB kept borrowing costs unchanged, but signaled room for additional tightening as the Middle East conflict lifted energy prices again. The guidance implies a risk of higher-for-longer rates, weighing on interest-rate-sensitive assets. Overall impact is likely meaningful for euro-area rates and inflation expectations.

Analysis

The ECB kept borrowing costs unchanged, but signaled room for additional tightening as the Middle East conflict lifted energy prices again. The guidance implies a risk of higher-for-longer rates, weighing on interest-rate-sensitive assets. Overall impact is likely meaningful for euro-area rates and inflation expectations.