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ECB Breaks Silence: First Hike Since 2023 & What Comes Next
The ECB just broke a seven-meeting freeze with a unanimous 25bp hike — and revised inflation projections sharply higher. For macro investors, the question isn't whether the ECB moved; it's how many more times it will.
The ECB lifted its deposit rate to 2.25%, main refinancing rate to 2.40%, and marginal lending facility to 2.65%, effective 17 June. Staff now forecast headline inflation at 3.0% for 2026 and core at 2.5% — both materially above March projections. Markets are pricing two to three additional hikes this year, while PIMCO sees no more than two.
Crucially, the Governing Council refused to pre-commit to any rate path, keeping a data-dependent, meeting-by-meeting stance. Meanwhile, US CPI hit 4.2% year-over-year in May — the hottest since April 2023 — with the Fed holding at 3.50–3.75% and gold under pressure as "higher for longer" bets intensify across the Atlantic.
Subscribe to Hedgebra for daily institutional-grade analysis. Follow Gianluca Sidoti on LinkedIn and visit hedgebra.com for more.
The ECB lifted its deposit rate to 2.25%, main refinancing rate to 2.40%, and marginal lending facility to 2.65%, effective 17 June. Staff now forecast headline inflation at 3.0% for 2026 and core at 2.5% — both materially above March projections. Markets are pricing two to three additional hikes this year, while PIMCO sees no more than two.
Crucially, the Governing Council refused to pre-commit to any rate path, keeping a data-dependent, meeting-by-meeting stance. Meanwhile, US CPI hit 4.2% year-over-year in May — the hottest since April 2023 — with the Fed holding at 3.50–3.75% and gold under pressure as "higher for longer" bets intensify across the Atlantic.
Subscribe to Hedgebra for daily institutional-grade analysis. Follow Gianluca Sidoti on LinkedIn and visit hedgebra.com for more.
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By Gianluca SidotiThe ECB just broke a seven-meeting freeze with a unanimous 25bp hike — and revised inflation projections sharply higher. For macro investors, the question isn't whether the ECB moved; it's how many more times it will.
The ECB lifted its deposit rate to 2.25%, main refinancing rate to 2.40%, and marginal lending facility to 2.65%, effective 17 June. Staff now forecast headline inflation at 3.0% for 2026 and core at 2.5% — both materially above March projections. Markets are pricing two to three additional hikes this year, while PIMCO sees no more than two.
Crucially, the Governing Council refused to pre-commit to any rate path, keeping a data-dependent, meeting-by-meeting stance. Meanwhile, US CPI hit 4.2% year-over-year in May — the hottest since April 2023 — with the Fed holding at 3.50–3.75% and gold under pressure as "higher for longer" bets intensify across the Atlantic.
Subscribe to Hedgebra for daily institutional-grade analysis. Follow Gianluca Sidoti on LinkedIn and visit hedgebra.com for more.
The ECB lifted its deposit rate to 2.25%, main refinancing rate to 2.40%, and marginal lending facility to 2.65%, effective 17 June. Staff now forecast headline inflation at 3.0% for 2026 and core at 2.5% — both materially above March projections. Markets are pricing two to three additional hikes this year, while PIMCO sees no more than two.
Crucially, the Governing Council refused to pre-commit to any rate path, keeping a data-dependent, meeting-by-meeting stance. Meanwhile, US CPI hit 4.2% year-over-year in May — the hottest since April 2023 — with the Fed holding at 3.50–3.75% and gold under pressure as "higher for longer" bets intensify across the Atlantic.
Subscribe to Hedgebra for daily institutional-grade analysis. Follow Gianluca Sidoti on LinkedIn and visit hedgebra.com for more.