ECB set to stay put
Economists expect the ECB to keep its deposit rate at about 2% and remain data‑dependent, effectively holding policy 'on ice' through 2026 despite upside inflation risks — a Reuters poll and economist rundowns captured the split between markets and forecasters on March 13 Reuters ainvest. Some forecasters even argue the ECB could keep rates higher for longer, reshaping carry trades and euro‑area fixed‑income positioning into year‑long bets.
A Reuters [poll found]wixx.com that 67 of 72 economists polled March 9–13 expected the ECB to leave policy unchanged through 2026, a median outlook the survey said had been unchanged since October. Markets have diverged: interest‑rate futures are reported [to fully price]money.usnews.com a hike by end‑July with roughly a 55% chance of a second by end‑December, and Germany’s two‑year Schatz yield jumped about 40 basis points this month.money.usnews.com [Bloomberg noted]bloomberg.com that a subset of forecasters stretches the hold into 2027–28, a split analysts say is already altering carry strategies and euro‑area fixed‑income positioning as investors tilt toward longer, income‑focused bets.bloomberg.com The ECB Governing Council is scheduled to meet on March 18–19 with a press conference on March 19, per the ECB calendar,ecb.europa.eu even as policymakers including Latvijas Bank governor Martins Kazāks have publicly urged the central bank to “sit tight” while fallout from the Middle East remains uncertain.msn.com
