It looks like things will be even more difficult for borrowers, as the European Central Bank decides tonight whether to raise interest rates again, this time by a smaller percentage, i.e. by 25 basis points.
Eurozone inflation rose to 7% in April. The European Central Bank's survey of bank lending showed an extremely large drop in credit demand due to tighter lending criteria, underpinning a smaller rise in interest rates.
It is recalled that the Fed yesterday increased interest rates by 25 basis points for the tenth time, despite the recent banking crisis. The key interest rate now stands at 5-5,25% and is at its highest level since 2006.
The Fed noted, however, that it will monitor the effects of successive hikes on the real economy to decide whether to continue this monetary policy to bring inflation down to 2%.
Source: Economytoday