ECB Raises Rates in June Over Inflation Outlook

ECB policymakers view a June rate hike as very likely as the inflation outlook moves toward an adverse scenario. Sources indicate the central bank is likely to be noncommittal about July. Many ECB policymakers would prefer to wait until the September projections to decide if a follow-up step is needed.

The ECB is expected to remain cautious in its July communications.

Officials are weighing whether additional tightening will be required after the June decision.

The adverse inflation scenario is prompting the shift toward a June hike. Policymakers are monitoring incoming data ahead of the September projections.