The Federal Reserve is far from the only central bank lifting rates in big steps. The European Central Bank on Thursday is expected to make its second consecutive jumbo sized rate hike of 75 basis points, taking its main policy rate to 1.5%. The decision is due at 2:15 p.m. local time, or 8:15 a.m. Eastern, with President Christine Lagarde’s press conference scheduled a half-hour later.
It comes amid a deteriorating backdrop in the eurozone economy. The most recent flash eurozone composite purchasing managers index fell further into contractionary territory, as Germany’s manufacturing base reels. But the ECB is set to keep lifting rate with inflation at a record 9.9%. “While a dovish minority will be mindful of rising recession risks and tightening financial conditions, another hike of 75bps this month is likely to be uncontroversial,” said economists at Daiwa Capital Markets. “While the post-meeting statement will likely repeat that future policy decisions will continue to be data-dependent and made on a meeting-by-meeting basis, it will also likely make clear that rates will likely rise again before year-end.” Economists at UBS agreed. “We expect the ECB’s communication to remain on the hawkish side and think it will reiterate i …