On Wednesday, the price of the CAC 40 dropped by 0.7% to 8,003, reversing gains from the previous session and following the trend of its European rivals. This decline was pushed down by increased expectations of a rate hike by the European Central Bank. Peter Kazimir, a member of the Governing Council of the European Central Bank, issued a warning that the crisis in Iran and its impact on inflation could force the central bank to take action sooner than expected.

This is despite the fact that the ECB is still in a “good place” and there is no immediate need to move at the meeting that will take place the following week. Christine Lagarde, the President of the European Central Bank, stated once again that the central bank is prepared to take action in order to maintain control of inflation. Her emphasis was placed on the organization’s dedication to bringing inflation down to the medium-term target of 2%, particularly in light of the fact that the ongoing conflict in the Middle East is driving up oil prices.

At this point, the markets are pricing in at least one 25 basis point increase for this year, and some traders are considering the prospect of two increases. The bulk of equities were trading in the negative, with LVMH (-1.1%), Safran (-1.3%), Essilor (-1.4%), and Societe Generale (-1%) being among the worst performers.