Goldman Sachs: ECB more likely to raise rates by 25 basis points than by 50 basis points

07/15 05:21

Goldman Sachs expects the ECB to raise policy rates by 25 basis points next week and provide more details on its sovereign bond market. Although the sharp depreciation of the euro, recent interest rate hikes by central banks and further rise in inflation expectations all suggest that a 50 basis point hike is possible, Goldman Sachs believes that a 25 basis point rate hike is still more likely. That's because the ECB's Governing Council has strongly guided for a 25 basis point rate hike. Growth prospects in Europe have weakened, and the European Central Bank has never in history raised rates at a discount rate below 70%.
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