Banks eye three ECB rate hikes this year as former Governor says he sees no stagflation — yet

Brokers now expect the ECB to hike interest rates this year as higher inflation and weaker growth increase pressure on central banks to act. The shift tightens market expectations for monetary policy, likely putting upward pressure on bond yields and creating a more risk-off tone for equities and FX sensitive to rate differentials.

Analysis

Brokers now expect the ECB to hike interest rates this year as higher inflation and weaker growth increase pressure on central banks to act. The shift tightens market expectations for monetary policy, likely putting upward pressure on bond yields and creating a more risk-off tone for equities and FX sensitive to rate differentials.