The European Central Bank (ECB) signaled that it may proceed with further interest rate hikes due to inflation forecasts that remain too high for too long. This decision comes in a context of persistent inflationary pressure in the eurozone.
The institution led by Christine Lagarde acknowledges that inflation levels continue above desired levels, which forced the ECB to reassess its monetary policy and consider new tightening measures.
However, the so-called "resilience" of the European economy offers some comfort to ECB officials, who believe that these interest rate hikes will not necessarily lead to a recession. The economy has demonstrated the capacity to withstand the increase in the cost of money without entering significant contraction.
