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Hendrix Vachon
Principal Economist
Essentials of Monetary Policy
Rates Raised Another 50 Points Despite the Recent Market Turmoil
March 16, 2023
The tensions that have recently emerged in the financial system add a lot of uncertainty and could have prompted the ECB to be more cautious. Lastly, the still-too-high inflation justified further monetary tightening.
If financial tensions ease, the ECB is likely to continue monetary tightening, but if the situation worsens, it may want to take a more cautious approach. For now, we expect two more 25-basis-point increases by the summer.
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