On Thursday, the European Central Bank increased its benchmark interest rate by 25 basis points due to strong inflation that is "projected to remain too high for too long."
The Eurosystm team has made some macro estimates, and they predict that headline inflation will average 5.4% in 2023, 3.0% in 2024, and 2.2% in 2025.
Starting on June 21st, the European Central Bank (ECB) raised interest rates across the board, including for major refinancing operations (4.00%), the ECB's marginal lending facility (4.25%), and the ECB's deposit facility (3.50%).
In the future, the Governing Council "will ensure that the key ECB interest rates will be brought to levels sufficiently restrictive to achieve a timely return of inflation to the 2% medium-term target and will be kept at those levels for as long as necessary," they stated.
The European Central Bank's Governing Council has said that the reinvestment component of the asset purchase program will be terminated as of July 2023.
As inflation continues to rise, the ECB raises the key rate by a quarter point.
