AMB Chooses to Keep Rates Steady

ECB's Wait-and-See Strategy on Borrowing Costs

European Central Bank (ECB) is taking a cautious stance regarding the future of borrowing costs. Officials prefer to keep interest rates steady while carefully monitoring inflation risks.

Interest Rate Remains Unchanged

According to information shared by Bloomberg, the ECB kept interest rates steady at 2% for the fourth consecutive meeting. Following this, officials stated that it is still too early to predict the next steps. Market analyses indicate a few months of an 'interim period', but no definitive signal has been provided by the bank.

Market Activity is Increasing

Diverse opinions within the bank are increasing market volatility. In particular, the 'hawkish' board member Isabel Schnabel indicated that the next move might be an interest rate hike and expressed that she would not be uncomfortable with this situation. This statement has led to some positions being re-priced in the markets.

Different Voices, Different Opinions

On the other hand, board member Olli Rehn disagreed with Schnabel's views. Highlighting geopolitical tensions and the risks of trade wars, Rehn stated that they would not make any commitments toward a monetary policy direction due to current uncertainties.

Experts' Views

The President of the Estonian Central Bank Madis Muller emphasized the difficulty of predicting six months ahead, noting that scenarios exist in both directions. The President of the French Central Bank Francois Villeroy de Galhau and the President of the Latvian Central Bank Martins Kazaks expressed their agreement that the risks of inflation are two-sided and that making early guidance could have negative effects on the markets.