ECB's Nagel Signals Rate Hike Next Week, but Cautious Beyond

European Central Bank (ECB) Governing Council member Joachim Nagel hinted that interest rates will increase next week, but expressed caution beyond that point. In an interview published on Wednesday, he stated that markets are pricing in a probability of more than 95% for a rate hike at the September meeting.

Nagel's comments suggest that the ECB is poised to raise borrowing costs as expected by investors. He acknowledged that the market has a good understanding of how the central bank will respond at this stage, implying that the decision is already largely priced in.