New record levels for the European Central Bank (ECB): It's been evident for a while that the current cycle of interest rate hikes is the most aggressive since the introduction of the Euro in 1999. Totaling 450 basis points within just 15 months is unprecedented. With this recent interest rate increase, it's also become the longest cycle. There have never been ten consecutive interest rate hikes before. The previous longest cycle consisted of nine increases, spread over the period between December 2005 and July 2008. Moreover, the deposit rate has now reached an unmatched 4.0%.

However, this is not the decisive factor in assessing the decision. What's much more important is that with this recent interest rate hike, the ECB is sending a clear signal – namely, that it is serious about returning to the 2% inflation target and won't yield hastily at the first signs of weakening price pressure. Considering the already heightened inflation expectations and the impending wage negotiations, particularly in Germany, this is an important and well-founded step. The risk of a second inflation wave like in the 1970s may seem small at the moment, but it should not be dismissed lightly.

Of course, there were good arguments for a pause in interest rate hikes as well. The previous increases haven't fully taken effect yet, inflation is receding – albeit slowly, and the Eurozone economy is struggling. However, for the ECB, the current priority must be clear: price stability takes precedence in doubtful cases. Sustainable growth is not possible without stable prices. Additionally, the extra 25 basis points are unlikely to deliver a devastating blow to the economy.

If the ECB is serious about combating inflation, it cannot hastily rule out further interest rate hikes. It's understandable that it is now proceeding with caution, including the outlook that the peak in interest rates might have been reached. With each subsequent interest rate hike, the bar for another step naturally gets higher. It may well be that this latest hike may suffice for now. However, that is not certain. It would be wrong to completely reverse the burden of proof now. Not only do the "hawks" need to provide a good rationale if they advocate for further rate hikes in the future, but the "doves" also need to explain precisely if they don't deem it necessary. The real policy rate – that is, the nominal rate minus inflation – is still negative. One thing is clear, though: interest rate cuts are off the table for the foreseeable future.

The most recent interest rate hike is now seen as a (final) triumph for the ECB "hawks" – and this assessment is not without merit. But above all, it signifies a victory for price stability.