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The European Central Bank is expected to hold steady next week, with the market closely watching economic forecasts and signals on the timing of interest rate hikes
BlockBeats News, December 14 — A Financial Times analysis points out that, given European Central Bank President Lagarde's statement that the bank is in a "good state," investors are widely expecting the European Central Bank to keep the benchmark interest rate unchanged at 2% next week and shift their focus to its economic forecasts. Lagarde stated this week that rate setters might again raise their growth forecasts for the Eurozone at the upcoming meeting. These stronger growth projections and persistent inflation have recently led traders to increase bets on a rate hike by the European Central Bank next year. However, due to ongoing debates over the potential shift in monetary policy direction and the fact that the swap market has only recently begun to price in this change in the past few weeks, traders will pay close attention to clues regarding the timing of rate hikes. Any adjustments to policy signals are expected to be subtle. George Morant, Eurozone economist at Royal Bank of Canada Capital Markets, stated that he does not expect the European Central Bank to raise interest rates in 2026 because of a "cyclical tailwind."
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