Traders Brace For Hawkish ECB As Inflation Risks Grow
Money markets are wagering that geopolitical tensions will complicate the ECB inflation battle. Traders expect rate hikes to push the deposit rate higher amid energy pressures.
Xurve View
Insights:
Xurve View
Money markets are pricing an aggressive European Central Bank pivot, wagering that the United States–Iran war will push the deposit rate to 3% by late 2027. Traders expect borrowing costs to climb further after a September hike as geopolitical shocks embed persistent inflation. That marks a sharp shift from prior months when a 3% terminal rate was off the table.
