When questioned on why the European Central Bank (ECB) has signaled its intention to raise interest rates by 25 bps in July and not by 50, President Christine Lagarde said that it is good practice to start an interest rate hiking cycle with an incremental increase that is sizeable, but not excessive, as per a tweet by Bloomberg’s Jonathon Ferro.
“We are now on our path to exit negative interest rates soon… it is good practice… to start with an incremental increase that is sizeable and not excessive… we also want to observe how markets will operate”
Press Lagarde on why they will hike 25bp in July and not 50bp
— Jonathan Ferro (@FerroTV) June 9, 2022
.