ECB Watch: 25bp hike as widely expected; slightly more hawkish tone than anticipated

Summary

ECB’s risk assessments for economic growth and inflation remain unchanged; the current policy stance “remains accommodative�. The ECB wants to reach an interest rate level that they feel more comfortable with; the tone of the statement supports our forecast of another 25bp hike (to 1.75%) this year. The ECB announced that it would waive the minimum credit rating required for Portugal’s debt to be used as collateral.

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