Overview
- Policymakers kept the deposit rate at 2.00%, the main refinancing rate at 2.15%, and the marginal lending rate at 2.40%, citing higher inflation risks from the Middle East energy shock.
- Christine Lagarde said the June meeting will be the right moment to reassess the outlook after a detailed debate over a possible increase that lacked enough data support.
- Eurostat’s preliminary estimate put April inflation at 3.0% year over year, the highest since September 2023, raising concern that costlier fuel and power could pass through to more goods and services.
- The Federal Reserve left its rate at 3.5% to 3.75% for a third straight meeting after last year’s cuts, with Jerome Powell’s term ending May 15 and Kevin M. Warsh nominated to succeed him.
- Futures point to two ECB hikes by year-end, a path that would push up costs for variable-rate mortgages and business loans if carried out.