European markets are heading for a lower open Tuesday as investors assess the interest rate outlook for 2023.
Last week, the European Central Bank hiked its key interest rate from 1.5% to 2% and said it would look to shrink its balance sheet by around 15 billion euros ($15.9 billion) every month from March 2023 to the end of the second quarter. The ECB said rate hikes would need to continue “significantly at a steady pace.”
The Bank of England and the Swiss National Bank struck similar tones and also opted for 50 basis point hikes, matching the U.S. Federal Reserve’s decision last Wednesday. Fed Chairman Jerome Powell also indicated that the central bank’s efforts to rein in inflation are far from over, and said policymakers will “have to stay at it.”