Summary

• As stagflationary pressures in the eurozone increase, the ECB has decided to keep interest rates on hold.
• The policy statement didn't give any hint at the next steps. It looks as if the ECB is in no rush to hike.
• Looking ahead, even though the ECB’s primary policy goal is price stability, it’s hard to see that it would really want to fight an exogenous supply shock at the cost of worsening an economic downturn.

By Carsten Brzeski, Global Head of Macro

The ECB has kept interest rates on hold and stuck to a steady-hand approach, acknowledging increasing stagflationary pressures in the eurozone

As stagflationary pressures in the eurozone increase, the ECB has