Money Markets Could Be Underestimating ECB Rate Increases — Analysis

Photographer: Alex Kraus/Bloomberg Photo: Alex Kraus/Bloomberg News

Markets are likely to be underestimating how much more the European Central Bank will have to raise interest rates by assuming that inflation will fall swiftly from current very high levels, analysts say.

The ECB raised interest rates by 25 basis points last week, taking the deposit rate to 3.25%, and President Christine Lagarde gave a strong message that rates would rise further.

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