ECB Hikes Rates, Lowers Growth Forecasts, and Raises Inflation Outlook

The European Central Bank (ECB) implemented a 25 basis point rate hike in June, a move widely anticipated by markets. Concurrently, the ECB revised down its growth forecasts for the current and next year while increasing its inflation projections for the same periods. ECB President Lagarde emphasized the necessity of the hike and provided limited forward guidance, noting that inflation is expected to return to target in the second half of 2027.