ECB to limit interest-rate hikes to 2022 only: HSBC

Bloomberg

The European Central Bank (ECB) will stop hiking interest rates after the end of 2022, when a euro-area recession and easing price pressures will restrain monetary-policy tightening, according to HSBC.
Cuts to Russian natural gas supplies and resulting surges in energy costs will drive inflation higher than previously expected, to a peak of 10% in October, HSBC economists led by Simon Wells said in a report to clients. The squeeze on household incomes will make a recession “probably unavoidable.”
The ECB will raise rates by 50 basis points in September — with a risk of a higher 75 basis-point step — followed by 25 basis-point increases in October and December, according to the report. HSBC previously predicted hikes through March 2023.
The European Central Bank last month raised rates by 50 basis points and indicated it plans to increase borrowing costs again. Subsequent data have shown inflation just shy of 9%, more than four times the central bank’s target.