ECB: focus on data and meetings to avoid predefined paths

The ECB's continued emphasis on data dependency and a meeting-based approach highlights the Central Bank's determination to avoid taking a fixed path. While today's hike may not necessarily represent the start of a sustained cycle of rate hikes, the energy shock does create room for further tightening. At the same time, the weakening of growth momentum increasingly raises questions about the speed - and, ultimately, the breadth - of the interventions that the ECB will be able to undertake. We believe there is still room for two or more hikes aimed at 'risk management' and aimed at containing inflationary risks, although monetary policy forecasts remain highly sensitive to developments in the Middle East.

*Deputy chief investment officer of Fixed Income and head of Fixed Income Macro investing at Goldman Sachs Asset Management