ECB Follows Fed's Pause with 25 Basis Point Rate Hike

The European Central Bank (ECB) has raised its main interest rate by 25 basis points to 3.5% in an attempt to bring down record-high inflation across the region. Despite the recent cooling in inflation, the ECB actually raised its headline and core expectations for this year and the next. The ECB also turned more negative about growth in the coming years. An additional challenge for the ECB is the lackluster growth in the region. Poor economic performance might limit the ECB's ability to increase rates further to rein in inflation.