European markets looked set to open slightly higher Friday, as investors react to a record rate hike by the European Central Bank and further comments from Federal Reserve Chair Jerome Powell.
On Thursday, the European Central Bank announced a 75 basis point interest rate rise, taking its benchmark deposit rate to 0.75%. The bank also revised up its inflation expectations — to an average 8.1% in 2022 — and said it expects to hike rates further as “inflation remains far too high and is likely to stay above target for an extended period.”
Meanwhile, the Fed’s Powell said Thursday that the U.S. central bank will raise rates to tackle inflation “until the job is done.”
“History cautions strongly against prematurely loosening policy,” Powell said at the Cato Institute, a libertarian think tank based in Washington, D.C. “I can assure you that my colleagues and I are strongly committed to this project and we will keep at it until the job is done.”