Key insights
- ECB members considered a rate hike in April due to persistent inflation, but ultimately decided to hold. This hawkish leaning, while not directly impacting US equities, signals potential global monetary tightening, which could indirectly pressure US markets if it leads to a stronger dollar or weaker global growth.
FRANKFURT, May 28 (Reuters) - The European Central Bank’s decision to keep rates unchanged last month was a close call for some policymakers as signs of persistently high inflation made it hard to look past the energy-driven shock, the accounts of the meeting showed on Thursday.
"A number of members noted that the decision was a close call and that they would not have opposed raising rates at the current meeting had this been on the table," the ECB said in the accounts of the April 29-30 meeting.
"The option value of waiting to raise policy rates had decreased since the last meeting, and it had become increasingly unlikely that a ’looking through’ approach without any monetary policy action would be appropriate," the ECB said.