A recent survey indicates a strong consensus among economists regarding the European Central Bank's (ECB) next monetary policy move. Approximately 83% of surveyed economists foresee the ECB raising its deposit facility rate by 25 basis points (bps) in September, pushing it to 2.50%. This expectation reflects a growing sentiment compared to previous polls conducted before the July and June meetings, where 72% and 65% respectively predicted a hike.
This anticipated adjustment would follow a series of rate increases implemented by the ECB as it navigates persistent inflationary pressures within the Eurozone. For retail forex and CFD traders, shifts in ECB interest rates can significantly influence the euro's strength against other major currencies, impacting various currency pairs and related derivatives.
Projected Rate Path Beyond September
Following the potential September hike, the majority of economists surveyed expect the ECB to maintain this rate level for an extended period. Specifically:
- Around 80% of economists predict the deposit facility rate will remain at 2.50% through the end of the current year.
- A substantial 63% anticipate the rate will hold at 2.50% until at least the third quarter of 2024.
The ECB has previously characterized interest rates between 1.75% and 2.25% as being in a 'neutral' zone. A 2.50% deposit facility rate would position monetary policy in a slightly restrictive stance, a move policymakers might hope will help manage inflation without overly stifling economic activity.
This outlook suggests a period of stability in the ECB's benchmark rates after an initial September adjustment, providing some clarity for market participants regarding the central bank's near-term trajectory.
📰 Based on reporting from: ForexLive →