The European Central Bank intends to raise interest rates by 0.25 percentage points in July.
A larger rate hike of 0.50 percentage points is then very likely in September.
This was announced by ECB President Christine Lagarde last week - and thus attracted a lot of attention.
But what's next?
The Bloomberg news agency has now asked economists how they assess the further development of key interest rates after these two dates.
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The result was that most economists expect further quarter-point increases after a rate hike of 50 basis points in September.
After all, the economists expect a further interest rate hike at each of the three remaining meetings of the ECB Council this year.
However, after the big rate hike in September, economists estimate they will return to smaller intervals, including two in the first half of 2023 – in February and June.
With euro-zone inflation at an all-time high, more than four times its own 2% target, the ECB is now yielding to pressure to raise its deposit rate from minus 0.5% and bring it into positive territory.
However, the money markets expect significantly more aggressive steps than the economists.
Market bets imply tightening of 171 basis points by year-end, while economists see only 125 basis points.
ECB inflation forecasts still too timid?
"We don't see anything that would lead to a downward revision of the ECB's medium-term inflation forecast over the next three to six months," said economists James Rossiter, Pooja Kumra and Mazen Issa of TD Securities. "If anything, the ECB's inflation forecasts are watching tentative, and as it faces tightening jobs data and upside inflation surprises, it is likely to continue raising until it hits neutral in March 2023.”
Reactions to Lagarde's announcement last week have varied.
"The ECB is on the right track," said Michael Heise of HQ Trust.
"The end of securities purchases comes at least three months too late," said Friedrich Heinemann from the ZEW research institute.
"The ECB only announced an interest rate hike of just 0.25 percentage points for July," said Jörg Krämer, chief economist at Commerzbank.
With this hesitation, she risks that people's inflation expectations will continue to rise and that high inflation will become permanent: "To prevent this, the ECB should increase its deposit rate by half a percentage point in July at the latest."
Stock and bond prices reacted quite clearly, with yields on southern European government bonds rising in particular.Keywords: