ING: Federal Reserve and European Central Bank likely to raise interest rates at least one more time

ING now projects that the U.S. Federal Reserve and the European Central Bank (ECB) will each raise interest rates once before the end of this year, a shift from its earlier forecast of keeping rates unchanged. In a report, ING economists stated, “The Fed’s Wednesday meeting and last week’s ECB meeting indicate that the two central banks are unlikely to pursue the very loose monetary policy we had previously anticipated.” The economists pointed out that both central banks are currently grappling with supply-side shocks triggered by surging energy prices, though the impact on the broader economy remains limited for now; meanwhile, the public still recalls the sharp surge in inflation in 2022 and the delayed monetary policy response at that time. The economists expect both central banks to hike interest rates in December.