The ECB raised rates for a second time this year on Thursday, citing the need to
curb energy-driven inflation stemming from the Iran conflict. Attacks since late
August on military, shipping and energy targets have pushed Brent back above
$100/bbl and renewed concern about fuel-driven price pressure in the euro area.
Financial markets price roughly one more hike this year and another one to two
next year; many economists view Thursday’s move as possibly the ECB’s last for
now, though growing numbers expect further tightening. The ECB offered no
forward guidance, reiterating policy will be data-dependent. Investors will look
to President Lagarde’s press conference for clues. Senior economist Martin
Wolburg said he expects Lagarde to maintain a hawkish wait‑and‑see stance while
leaving the door open to additional tightening.
