ECB’s DeMarco backs October hike as core inflation stays firm
Alexander DeMarco, the Governor of the Central Bank of Malta and member of the Governing Council of the European Central Bank (ECB), crossed the wires on Tuesday, saying that “stronger core inflation” could be a reason for the central bank to act, saying that he supports a rate hike in October.
ECB Governor Alexander DeMarco has indicated support for a potential rate hike in October, citing strong core inflation as a reason for the move. This comes after the ECB's September decision to lift rates by 25 basis points, with DeMarco noting that the Middle East continues to generate inflation pressures and inflation is expected to remain well above target for an extended period.
While money markets currently price in a 57% chance of a rate hold at the October 29 meeting, with December hike odds at 84%, the European Central Bank's economic situation is described as fragile, with a recent rise in long-term bond yields raising concerns.
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