European Central Bank Expected to Maintain Interest Rates, Analysts Say

Several major financial institutions have projected that the European Central Bank (ECB) will keep interest rates unchanged in its upcoming meeting. According to Jin10, Goldman Sachs anticipates that the ECB will signal readiness to act, with potential rate hikes of 25 basis points in June and September. UniCredit also expects the ECB to maintain rates, with possible hikes in June and September, and suggests that if the U.S. Federal Reserve cuts rates later this year, the euro could rise above 1.20 against the dollar. Société Générale predicts the ECB will emphasize a data-dependent policy path and reassess its strategy in June with updated economic forecasts. Commerzbank foresees a rate hold, followed by a hike in June, and notes that a potential Fed rate cut by year-end could lead to a modest euro appreciation against the dollar. Mitsubishi UFJ Financial Group expects the ECB to maintain its current guidance, but indicates readiness to hike rates in the next meeting if Middle East tensions do not improve swiftly. TD Securities warns that failure to commit to a June rate hike could lead to a euro decline, with ECB President Christine Lagarde likely to stress uncertainties and risks of rising inflation and weakening growth. S&P Global suggests that with inflation expected to rise in the coming months, the question of an ECB rate hike is increasingly about timing rather than possibility. Danske Bank anticipates rate hikes in June and July, with a potential rate cut earlier than market expectations, possibly by spring 2027. ING highlights the risk of stagflation in European data, urging the ECB to send a strong signal that rate hikes are under consideration. Nordea Bank expects the ECB to keep all options open for the June meeting, with communication likely leaning hawkish to support rate hike expectations.