The ECB gets going

The June meeting will mark the beginning of the normalization of the ECB’s policy stance , that will take policy rates 150bp higher over the course of the next six quarters . While the uncertainty regarding the economic outlook remains exceptionally high, a majority in the ECB’s Governing Council now views , we think, a continuation of the “wait-and-see” approach as incompatible with medium-term price stability . More specifically we expect the ECB to announce an end of net purchases in June (becoming effective in July) , followed by a first 25 bp rate hike in July . The July hike will be only the first in a series of hikes that will get the main refinancing rate to 1.5% and the deposit rate to 1.0% by September 2023.