The president of the European Central Bank, Christine Lagarde, said that the regulator will most likely have to continue raising key interest rates after the March meeting. Earlier in February, the central bank raised all three rates by 50 basis points and announced its intention to increase them by the same amount in March. According to Lagarde, a rate hike in March is very likely and necessary. However, it is unclear at what pace the Central Bank will raise rates at each subsequent meeting. Moreover, the ECB's marginal rate level will be determined by incoming macroeconomic data. Market participants currently expect that the regulator will raise deposit rates by 50 bps in March from the current level of 2.5%, and by February 2024 it may be increased to the level of 4% per annum. Lagarde also stressed that interest rates will have to remain at levels limiting economic activity for some time, and the Central Bank should not lower them until it is sure of achieving the inflation targets (2%). Meanwhile, the decline in price pressure in the eurozone is not stable. According to preliminary data from Eurostat, inflation in the eurozone slowed to 8.5% in annual terms in February from 8.6% in January. At the same time, the growth of consumer prices excluding food and energy (CPI Core index) accelerated to a record 5.6% from 5.3% a month earlier.
