AMB Chooses to Keep Rates Steady

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

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

Interest Rate Remains Unchanged

According to information shared by Bloomberg, the ECB kept interest rates stable at 2% for the fourth consecutive meeting. Following this situation, officials stated that it is still too early to predict the next steps. Market analysis indicates an expectation of a few months of ‘wait-and-see’ period, but no clear signal has yet come from the bank.

Increased Activity in the Markets

Various opinions within the bank are increasing volatility in the markets. Especially, "hawkish" board member Isabel Schnabel stated that the next move could be an interest rate hike, and she would not be troubled by 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 stated that he disagreed with Schnabel's views. Rehn emphasized the geopolitical tensions and trade war risks, indicating that they would not make any commitments towards a specific monetary policy given the current uncertainties.

Experts' Opinions

Estonian Central Bank President Madis Muller emphasized that it is difficult to predict six months ahead, mentioning that scenarios exist in both directions. French Central Bank President Francois Villeroy de Galhau and Latvian Central Bank President Martins Kazaks also stated that inflation risks are two-sided, agreeing that making early guidance could have negative effects on the markets.