ECB: Some members wanted 50 bps hike in May
Some members of the European Central Bank (ECB) Governing Council were in favor of a 50-basis point interest rate hike at the last monetary policy meeting in May, the meeting minutes showed on Thursday. They argued that "continued upside inflation surprises" posed upside risks and that inflation is "projected to be above target over at least four years." They cited receding recession risks and broadening price and wage pressures as evidence that inflation is unlikely to drop quickly enough.
However, most of these members also signaled they would accept a smaller rate hike, according to the meeting minutes. In the end, a 25 bps rate increase was accompanied by the message that further interest rate increases would be warranted. "This decision was seen as striking the right balance between meeting the need for further rate increases and accounting for elevated uncertainty about the speed and strength of monetary policy transmission," the ECB said.