On Wednesday 11 May, the likelihood of the European Central Bank changing its main policy rates this summer for the first time since 2014 increased again; this change would be in response to soaring prices.
On a trip to Slovenia, the President of the monetary institute, Christine Lagarde, stated that a first rate hike will take place “some time after the end of net asset purchases” via the ‘APP’ operation, while she anticipated the completion of this to be “early in the third quarter”.
We haven’t precisely defined what ‘some time’ means, but “but I have been very clear that this could mean a period of only a few weeks”, she added. She also noted that the monetary policy normalisation process would be “gradual”.
Some people have predicted that the deposit facility rate, which is currently set at -0.50%, will return to positive territory by the end of 2022 by means of three 0.25% hikes.
The ECB Governing Council will meet in Amsterdam on 9 June and then in Frankfurt on 21 July. (Original version in French by Mathieu Bion)