Standard Chartered analysts expect the ECB to delay further rate hikes until December, citing cooling core inflation and growth risks from higher yields.
Standard Chartered analysts suggest that the European Central Bank is unlikely to implement a rate hike in October, citing core inflation that has only marginally increased since the start of the year. Furthermore, the firm highlights that elevated bond yields are creating significant downside risks for both economic growth and inflationary pressure, which weakens the fundamental outlook for the Euro.
Core inflation has only edged up slightly since January, and higher yields are creating downside risks to both growth and inflation.
The Governing Council is expected to wait for new macroeconomic projections to be released at the December policy meeting.
Standard Chartered analysts project the European Central Bank will hold interest rates steady in October. The firm cites only marginal core inflation growth and potential economic headwinds from elevated yields as primary drivers for a policy pause until December.
The firm points to only slight increases in core inflation and the negative impact of higher yields on regional economic growth.