Europe | Pause for now, June in play

Summary

Overall, the ECB delivered as expected, pausing to assess incoming data and the evolution of the war and energy shock. The lack of clear second-round effects supports this wait-and-see stance for now, but as uncertainty persists, the likelihood of a June rate hike is increasing.

Key points

• Key points:
• Rates unchanged, with the decision reflecting uncertainty and limited information
• The Council is moving away from the baseline, with focus on second-round effects.
• Macro tone mildly hawkish but balanced, with weaker growth and broader inflation pressures

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