Although European Central Bank (ECB) President Christine Lagarde has repeatedly expressed her hawkish stance, some market observers question how far the central bank will stay on track.
The ECB is currently in a tightening phase by implementing four rate hikes in an effort to combat high inflation across the European Zone.
The latest data shows two months in a row of headline inflation, but it is still well above the 2% target. As a result, ECB policymakers continue to offer hawkish statements to continue raising interest rates.
Even so, market observers began to wonder, until when will this stance last?
Analysts from UniCredit said uncertainty for central bank moves after March was higher, with ECB policymakers seen as remaining hawkish for further hikes in the second quarter.
However, policymaker Fabio Panetta said earlier this week that the central bank should not be too committed to a rate change after its March meeting.
This statement is seen by analysts as policy makers are beginning to be cautious in offering an indication of the central bank's direction this year.
Meanwhile, a Reuters poll released earlier this week showed that markets expect the ECB to hold off on rate hikes in the second quarter when its deposit rate stands at 3.25%.
This signals that the central bank will implement several more increases in its main deposit rate which currently stands at 2.00%.
The ECB meeting that will take place next week is now the main focus of investors who are expected to raise rates by 50 basis points.
