Citi: ECB likely to keep raising rates despite market turmoil

April 4, Citigroup economists said in a report that despite the turmoil in financial markets, there may be little change in the European Central Bank‘s course of action. While the recent turmoil has significantly widened the range of possible outcomes for the euro zone economy and monetary policy, the ECB is expected to continue raising rates at a cautious pace until it sees an improvement in core inflation, they said.

Citi expects the ECB to raise interest rates by 25 basis points in May and continue at this more cautious pace in late spring and summer of this year. Citi expects the ECB deposit rate to peak at 4%, with a rate cut sometime in 2024.