ECB Should Maintain Stable Interest Rates While Market Focuses on New Projections
According to an analysis by the Financial Times relayed by BlockBeats, the consensus among investors is that the European Central Bank (ECB) should keep the basic interest rate at 2% in the meeting next week. The assessment comes after statements from ECB President Christine Lagarde, indicating that the institution is in a comfortable position at the moment. Consequently, the market's focus has shifted from rates to the new economic projections that will be released.
Lagarde recently indicated that the council may revise upwards the growth estimates for the eurozone during the meeting. This possible adjustment, combined with persistent inflation, has led traders to reinforce bets on potential interest rate hikes over the next year.
Still, any change in the trajectory of monetary policy remains a subject of debate. The repricing in the swaps market has only occurred recently, and investors should closely monitor any indication regarding the timeline for hikes, if any, knowing that clearer signals tend to be discreet.
For George Moran, an economist at RBC Capital Markets specializing in the eurozone, there is no expectation of a rate increase in 2026. He assesses that the current cyclical stimuli may be transient and emphasizes that the ECB has made it clear that it does not intend to react excessively to temporary deviations from its economic targets.
