Goldman lifts terminal rate for ECB to 3.5% | Forexlive

According to newswire sources, Goldman Sachs is raising its terminal rate for the ECB to 3.5% from 3.25% previously. They forecast another 25 base hike in June.

They say:

• continued labor market resilience at the aggregate level – combined with the structural pressures on wages – tilts the wrist toward a higher terminal ECB deposit rate than our 3.25 baseline

The ECB hiked rates to 3.0% when they announced their rate decision on February 2. At the time, ECBs Lagarde said that they intend to raise rates by 50 basis points at their next meeting and then monitor the path.

The ECB meets next on March 16. They meet again on on May 4th and then June 15.

Four days ago Lagarde said:

“In view of the underlying inflation pressures we intend to raise interest rates by another 50 basis points at our next meeting in March,”

Needless to say, Goldman is a little less hawkish than the ECB with their view (at least in the short term).