One more ECB hike seen in September before rates plateau through 2027
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The ECB's first rate increase since 2023 was largely anticipated, but the upward revision to inflation forecasts and the explicit signal of a further September hike removes any residual dovish interpretation of the decision. European sovereign spreads and rate-sensitive sectors f
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4 itemsOne more rate hike to go for the ECB?
Rates Spark: ECB ready to hike, just not today
The ECB is poised to maintain its policy rate at 2.25% today, aligning with market expectations, but a September rate hike appears increasingly likely as inflationary pressures mount, particularly from rising oil prices. Per the full note, while there is a possibility for a front-loaded hike, the ECB typically telegraphs its moves well in advance, suggesting that deviating from this pattern is improbable at this juncture. This positions traders to be vigilant for hints of a hawkish pivot in subsequent communications from the Central Bank, especially as the market anticipates nearly three hikes over the coming year. The consensus median target for GBP/USD remains at 1.35, corroborating the ECB's measured approach against volatility in inflation expectations.