The European Central Bank is expected to hold steady next week, with the market closely watching economic forecasts and signals on the timing of interest rate hikes

BlockBeats News, December 14 – The Financial Times analysis points out that, given European Central Bank President Lagarde’s statement that the bank is in a “good state,” investors are unanimously expecting the ECB to keep the benchmark interest rate unchanged at 2% next week and are shifting their focus to its economic forecasts. Lagarde stated this week that rate setters might raise their growth forecasts for the Eurozone again at the upcoming meeting. These stronger growth forecasts and persistent inflation have recently led traders to increase bets on the ECB raising interest rates next year. However, due to ongoing debate over the potential shift in monetary policy direction and the fact that swap market pricing has only recently reflected this change in recent weeks, traders will be paying close attention to clues regarding the timing of rate hikes, with any policy signal adjustments expected to be subtle. George Morant, Eurozone economist at Royal Bank of Canada Capital Markets, said he does not expect the ECB to raise rates in 2026, as “cyclical tailwinds may be temporary.” He added that the ECB has “explicitly stated that it does not want to overreact to temporary deviations from the target.” (Jin10)