J.P. Morgan Forecasts Two ECB Rate Hikes Starting in April
J.P. Morgan expects the ECB to raise rates in April and July due to inflation risks. The shift follows the bank holding its key interest rate at 2% on Thursday.
J.P. Morgan announced on Friday that it now expects the European Central Bank to deliver two interest rate hikes in April and July. This represents a major shift from its previous forecast of steady rates through 2026, as policymakers signaled discussions on hikes due to rising inflation risks. The shift comes after the central bank kept its key interest rate at 2% on Thursday, though officials expect to discuss increases in the coming months as the war involving Iran threatens to push up inflation in the euro zone.
The sudden change in outlook reflects growing concerns among policymakers about price stability. With the geopolitical situation impacting energy costs, the euro zone faces renewed inflationary pressure that may necessitate a faster-than-expected tightening of monetary policy.
