At the June meeting, the European Central Bank (ECB) announced that it will end net asset purchases as of July 1 and that it intends to increase interest rates at 25 basis points at the July meeting.
But there is more. Official interest rates are expected to rise again in September. All this will depend on the update of the medium-term inflation outlook. If the medium-term inflation outlook remains the same or deteriorates, the monetary authority warns that a higher increase will be appropriate at the September meeting.
At the same time, despite the slowdown in purchases, it is expected continue to fully reinvest the principal of the securities acquired maturing for an extended period after the date on which the ECB’s official interest rates begin to rise and, in any case, for as long as is necessary to maintain ample liquidity conditions.
The rise has not occurred, but the market discounts expectations so We can now begin to gauge what this movement means for our investment portfolio.