HSBC: Expect two more 25bp rate hikes from the ECB

On March 30, analysts at HSBC Global Research said in a report that the European Central Bank is expected to raise interest rates by another 25 basis points in May and June.

The ECB’s base case is that inflation is expected to remain too high for too long, while recent comments from policymakers mean HSBC will still see its key deposit rate at 3.5 percent, analysts said. peak, and raised interest rates by 25 basis points in May and June.

They see the risks to this view as fairly balanced, except that the ECB could pause rate hikes sooner if markets become unstable and/or there are moderate economic developments.