European Central Bank: Two more hikes remain the baseline – Nordea
Nordea analysts Jan von Gerich and Tuuli Koivu note that the European Central Bank (ECB) delivered a 25bp rate hike and signalled a bias toward further tightening as its projections show Eurozone inflation above target through 2028.
Nordea analysts Jan von Gerich and Tuuli Koivu have stated that the European Central Bank (ECB) has raised rates by 25 basis points and indicated a bias towards further tightening, with projections showing Eurozone inflation to remain above the target through 2028. The analysts expect additional 25 basis point hikes in December and March 2027, acknowledging upside risks from geopolitical tensions and energy prices, as well as downside risks to growth.
The ECB’s data-dependent approach and no pre-commitments to a specific rate path emphasize the bias towards further rate hikes based on baseline forecasts. The analysts maintain their view of two further 25 basis point hikes at quarterly intervals, with the next hike likely in December and the second in March 2027. However, they believe the ECB has time to monitor the evolving situation before raising rates again, given limited signs of broader inflationary pressures and a weakening in inflation momentum.
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