Euro: Proactive ECB seen as supportive – Commerzbank
Michael Pfister at Commerzbank notes that several central banks, including the European Central Bank (ECB), have already raised rates following the inflation shock linked to the Iran conflict.
Commerzbank analyst Michael Pfister highlights that several central banks, including the European Central Bank (ECB), have already increased interest rates in response to the inflation shock caused by the Iran conflict. He emphasizes that markets favor central banks that act promptly rather than labeling shocks as temporary. For the euro, Pfister sees the ECB's more aggressive approach as a positive sign after years of frustration.
In recent weeks, global central banks have revised their expectations of interest rate hikes due to the conflict's impact. While the Federal Reserve, Reserve Bank of Australia, and the Bank of Japan have raised rates since the conflict began, the ECB has not traditionally been known for proactive measures. Pfister views this change as a positive development for the euro post many years of disappointment.
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