ECB Hikes Rates to 2.50%, Sets Stage for December Peak

The European Central Bank (ECB) hiked interest rates by 25 basis points to 2.50% in September, as expected.

President Lagarde described the decision as a 'no-brainer', indicating a strong consensus among policymakers.

The ECB's tone remains hawkish, with core inflation projected to be above target at the end of the forecast horizon, implying that the tightening cycle is not over yet.

Lagarde balanced her hawkish tone by cautioning against reading too much into market expectations and emphasizing that policy decisions are made on a data-dependent basis.