European Central Bank keeps rates on hold in the face of inflation threat

the european central bank held its deposit rate at 2% on thursday, despite euro zone inflation jumping to 3% in april. the bank said upside risks to inflation and downside risks to growth have intensified, citing the war in the middle east and its effect on energy prices. lagarde told a press conference the outlook is "highly uncertain" and depends on how long the war lasts. the euro rose 0.2% against the dollar after the decision, to $1.17. german 10-year bund yields fell 3 basis points to 3.0580%, while french equivalents dropped 4 basis points to 3.7135%. some economists see a potential 25-basis-point hike at the june meeting, which would take the key rate to 2.25%. deutsche bank's mark wall said the ecb exudes "calm confidence" but rising concern the longer the conflict continues. kpmg's yael selfin noted policy rates are in neutral territory, increasing the need for the ecb to act "more swiftly" to prevent inflation from becoming embedded.