European Central Bank policymakers are edging towards a rate hike before the end of 2022 to stem more persistent than expected inflationary pressures and a stronger inflation outlook, Bloomberg reported on Friday citing ECB sources. A consensus is emerging ahead of the March meeting that would set September as the end date for asset purchases, the sources continued. 

Market Reaction  

The euro has not reacted to the latest ECB sources reported by Bloomberg. The hawkish drift in opinions held by ECB policymakers has been on full display since the early February meeting, where Lagarde at the time opened the door for a 2022 rate hike by refusing to rule it out as she had done in the past. In more recent days/weeks, prominent ECB policymakers have hinted towards a faster pace of tightening in 2022, with some explicitly outlining timelines that would see QE ended in Q3 and rate hikes in Q4.