The central bank diverged from the US Federal Reserve, which opted to pause its historic rate-hiking campaign Wednesday after 10 successive increases. “Inflation has been coming down but is projected to remain too high for too long,” the ECB said in its statement. Consumer prices in the euro area rose 6.1% in May compared with a year ago — the lowest level since Russia launched its full-scale invasion of Ukraine, sending global energy prices soaring.
Rising prices and higher interest rates are increasingly taking a toll on the euro area’s economy, which entered a mild recession around the turn of the year. That could bolster the case for the central bank to pause interest rate hikes soon. Investors will be on alert for any clues on the future direction of monetary policy when ECB President Christine Lagarde addresses reporters at 08:45 a.m. ET.