The ECB lowers its inflation expectations

As expected, the European Central Bank (ECB) has raised its key interest rates by 0.5% to 3.5%. In her press conference, ECB President Christine Lagarde repeatedly reiterated her goal of maintaining price and financial stability in the eurozone. Interestingly, the ECB now expects a lower overall inflation rate in the baseline scenario for the coming years than in December 2022. The ECB expects an inflation rate of 2.8% for the fourth quarter of 2023. Any deviation above the base scenario will create pressure for further interest rate hikes in the coming months.