Report: The expected rate hike by the European Central Bank is seen as a credibility measure.

Gordon Shannon of TwentyFour Asset Management stated in a report that the market has fully priced in the long-anticipated interest rate hike by the European Central Bank on Thursday, and he expects a second rate hike in September, with policy tightening becoming a credibility measure. "Even as downside risks to economic growth increase, the ECB is not prepared to overlook the energy-driven inflation acceleration," he said. "Tightening policy is proposed as a credibility measure, with memories of 2022 still fresh." Shannon anticipates that the ECB's communication may become more conditional and action-oriented, but not more explicit. "[ECB President Christine] Lagarde will not make premature commitments, but will instead reaffirm the ECB's data-driven, step-by-step approach to decision-making at each meeting."