Nordea forecasts three 25bp ECB hikes to 3% by March 2027, citing persistent inflation and strong Eurozone growth.
The European Central Bank is expected to deliver three additional 25-basis-point rate hikes, lifting the deposit rate to 3% by March 2027. Analysts cite rising inflation pressures from energy costs, supply chain strains, and robust Euro-area growth as key drivers for the moves.
Earlier projections anticipated consecutive hikes, but the timeline has been revised to quarterly increases in September, December, and March. Risks to the outlook include Middle East tensions and potential energy market disruptions, which could accelerate or delay the hiking cycle.
Despite a slower pace, longer-term bond yields may climb further due to ample supply, reduced ECB bond holdings, and elevated inflation-risk premia.