The vast majority of economists anticipate that the ECB will increase its deposit rate in June, according to a Reuters survey.
Compared to the previous survey, expectations for additional monetary tightening this year have increased.
A sizable portion of analysts think that the Eurozone is still at high danger of stagflation this year.
According to the most recent Reuters survey of analysts, the European Central Bank (ECB) may tighten monetary policy sooner than anticipated.
According to the study, 74 out of 80 economists, up from 59 out of 70 in the May survey, anticipate that the ECB will increase its deposit rate to 2.25% at its June 11 meeting. As inflation risks continue to exist, the change reflects a rising consensus in favor of tighter monetary policy.
Additionally, expectations have grown more hawkish for the remainder of the year. According to Reuters, 49 out of 80 analysts now predict two more rate increases in 2026, up from 34 out of 70 in the last survey.
According to 28 out of 42 analysts polled, there is a significant chance of stagflation this year, which is defined as sluggish economic growth combined with ongoing inflation. In the upcoming months, the European Central Bank may find it more difficult to make monetary policy decisions as a result of this combination.
Reaction of the market
The Reuters poll caused the Euro to react somewhat, but investors had already mostly factored in an increase in ECB interest rates in June, so the market impact was still minimal. As of this writing, EUR/USD is trading at 1.1620 on Wednesday, down 0.11% on the day, indicating that the survey has not significantly changed the overall market outlook for ECB policy.
Compared to the previous survey, expectations for additional monetary tightening this year have increased.
A sizable portion of analysts think that the Eurozone is still at high danger of stagflation this year.
According to the most recent Reuters survey of analysts, the European Central Bank (ECB) may tighten monetary policy sooner than anticipated.
According to the study, 74 out of 80 economists, up from 59 out of 70 in the May survey, anticipate that the ECB will increase its deposit rate to 2.25% at its June 11 meeting. As inflation risks continue to exist, the change reflects a rising consensus in favor of tighter monetary policy.
Additionally, expectations have grown more hawkish for the remainder of the year. According to Reuters, 49 out of 80 analysts now predict two more rate increases in 2026, up from 34 out of 70 in the last survey.
According to 28 out of 42 analysts polled, there is a significant chance of stagflation this year, which is defined as sluggish economic growth combined with ongoing inflation. In the upcoming months, the European Central Bank may find it more difficult to make monetary policy decisions as a result of this combination.
Reaction of the market
The Reuters poll caused the Euro to react somewhat, but investors had already mostly factored in an increase in ECB interest rates in June, so the market impact was still minimal. As of this writing, EUR/USD is trading at 1.1620 on Wednesday, down 0.11% on the day, indicating that the survey has not significantly changed the overall market outlook for ECB policy.
