The ECB does not stop, raising rates even after March

The ECB is determined to "stay the course" of rate hikes to bring down inflation and bring it back to the 2% target.

It confirms the 50 basis point tightening in March and promises further increases in the following months also because the specter of a recession is receding and no longer frightening.

On the contrary, "recent economic developments now appear more compatible with the 'soft landing' scenario, a soft landing of the monetary tightening process now that the economic prospects only point to a "slowdown". It is a clear message what emerges from the minutes of the February monetary policy meeting published by the ECB and corroborated by the words of the president Christine Lagarde herself.

Frankfurt does not want to tie hands and reiterates the "we will decide from time to time" approach.

But the clarification of the number one of the Eurotower in fact ignites speculation on what will be decided in May: whether a 25 basis point squeeze will be deemed sufficient, or if another half-point aggressive maneuver will be opted for.

A hawkish move would now seem to be more shared within the board - with the market assuming the peak of the interest rate hike cycle at 4% - taking into account that the minutes show marked concern for core inflation in the Eurozone, which surprisingly from 5.3% to 5.6% in February, while it is underlined that the drop in gas prices and the reopening of the Chinese economy make "a technical recession less likely".

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Furthermore, "it was generally believed that fears were premature" about the fallout from "excessive tightening".

Against this backdrop, the Governing Council "should stay on course by significantly increasing interest rates at a steady pace and keeping them at levels restrictive enough to ensure a timely return of inflation to the 2% medium-term objective", it is clarified in the minute reaffirming "the intention to raise interest rates by another 50 basis points at the next meeting" .

At the same time, the ECB launches the budget reduction plan (quantitative tightening) which to this day is watering down the effects of the rate hike to get rid of the hundreds of billions of bonds bought over the years: "the