The ECB eased the pace of its interest rate hikes on Dec. 15 but stressed significant tightening remained ahead and laid out plans to drain cash from the financial system as part of a dogged fight against runaway inflation.
It raised its rates by 50 basis points at that meeting and President Christine Lagarde hinted at as many as three more hikes of the same size.
"This was in some ways seen as broadly equivalent to raising rates by 75 basis points at the present meeting, because a less frontloaded but steadier approach to bringing interest rates to restrictive levels could be seen as consistent with the more persistent nature of the inflation process and continued elevated uncertainty," the ECB said.
It confirmed what was first reported by Reuters on Dec. 15.
Still, a large number of policymakers were initially arguing for a 75-basis-point increase and some held out until the very end.
Sources told Reuters said the stalemate ended when Lagarde offered to signal more 50-basis-point rises and a hawkish message on inflation during her press conference, convincing enough policymakers to back the proposal.
Investors priced in more ECB rate hikes after the ECB decision but they have been revising their expectations since the turn of the year, as inflation data came in lower than forecast and the Federal Reserve raised the prospect of smaller rate increases.
(Reporting By Balazs Koranyi; Editing by Francesco Canepa)
