Deutsche Bank: ECB will raise interest rates faster than expected

Deutsche Bank, Germany's largest bank, evaluated the new steps of the European Central Bank. Deutsche Bank analysts stated that the ECB's new tool could lead to faster rate increases.

Deutsche Bank: ECB will raise interest rates faster than expected. Deutsche Bank analysts, Germany's largest bank in terms of turnover and number of workers, evaluated the monetary policies of the ECB. Stating that the ECB's promise of a new tool to reduce market stress last Wednesday paved the way for a faster-than-anticipated interest rate increase, experts noted that there could be an increase of 25 basis points in July. Deutsche Bank analysts also; Predicted that in September, October and December, the ECB may increase by 50 basis points each. In the memo released by economists led by Mark Wall, it was emphasized that the ECB launched these types of instruments earlier than expected, reducing uncertainties for the second half of the year. The ECB held an emergency meeting, which was not planned before, after sharp rises in Italian bond yields last Wednesday, and after the meeting, it was stated that the Covid-19 epidemic created fragility in the Euro Zone. After the ECB announced that it is working on a new tool to reduce market stress, Italian bonds were bought while the gap between Italian and German bond yields narrowed. ECB Board Member Fabio Panetta added that such a step is needed in order to return inflation to the 2 percent target.