ECB may take policy action in June due to persistent energy shock
The European Central Bank may need to take policy action at its June meeting due to the persistent energy shock stemming from the Middle East conflict.
The energy supply shock is proving more durable than expected, pushing the ECB away from its baseline scenario.
The ECB deposit rate currently stands at 2%, and investors are pricing around three quarter-point hikes over the course of 2026.
The recent bond market selloff has tightened financial conditions significantly, highlighting prevailing inflation risks.