Goldman Sachs on Tuesday raised its terminal rate forecast for the European Central Bank (ECB) to 3.75% from 3.5%, citing easing worries about the banking system, signs of underlying inflation remaining strong and generally hawkish commentary from policymakers.
ECB policymakers converging on 25-bps rate hike in May
Goldman economists expect the ECB to raise rates by 25 basis points (bps) in May, June and July, but said the choice between a 25 bps and a 50 bps increase in May will be a close call due to lower banking risks, growth resilience and strength in underlying inflation.
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