The European Central Bank (ECB) is expected to keep its benchmark interest rate steady at 2% in its upcoming meeting, as investors focus on the bank's economic forecasts. ECB President Lagarde indicated potential upward revisions to eurozone growth projections, which, along with persistent inflation, have fueled speculation about future rate hikes. Despite this, debates over policy direction and recent changes in swap market pricing suggest traders will be attentive to any subtle hints regarding the timing of rate increases.
RBC Capital Markets economist George Morlan predicts no ECB rate hikes in 2026, citing temporary cyclical tailwinds and the ECB's cautious stance against overreacting to short-term deviations from targets. The situation is also being closely watched for its impact on Countering the Financing of Terrorism efforts within financial systems.
ECB Likely to Maintain Rates Amid Growth and Inflation Concerns
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