ECB Rate Hikes Limited as Growth Risks Rise

The European Central Bank's room for further rate hikes is narrowing due to a weakening growth outlook and persistent inflation, according to Christine Lagarde.

Lagarde has flagged inflation risks tilted to the upside and growth risks tilted to the downside, a combination that constrains how far the bank can push rates.

The Federal Reserve, meanwhile, has resumed hiking rates for the first time since 2023, with fed funds futures pricing roughly a 67% probability of another move in October.