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Brokerages push back ECB rate cut bets after policy meeting
Published by Global Banking and Finance Review
Posted on September 12, 2025
2 min readLast updated: January 21, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on September 12, 2025
2 min readLast updated: January 21, 2026
Brokerages adjust ECB rate cut forecasts, expecting steady rates into 2026, with potential hikes, following ECB's unchanged rate decision.
By Kanchana Chakravarty and Siddarth S
(Reuters) - Global brokerages expect the European Central Bank to keep interest rates steady for longer, extending into 2026, with some even forecasting the next policy move to be a hike, after the ECB left rates unchanged and maintained an upbeat view on growth and inflation.
The ECB held its key rate steady at 2% on Thursday, in line with expectations.
"We continue to be in a good place," ECB President Christine Lagarde told a press conference, adding that inflation was where the bank wanted it to be and the domestic economy remained solid.
The remarks prompted UBS Global Wealth Management to scrap its forecast for a December rate cut. UBS said it now expects the ECB to remain on hold for a 'prolonged period', joining Goldman Sachs, which does not expect any rate cuts this year.
Traders are pricing an 84% probability that the central bank holds rates steady until the end of 2025, according to LSEG data.
TD Securities, along with Deutsche Bank and BNP Paribas, expects the ECB will raise interest rates in 2026 after keeping them unchanged through the end of the year.
Lagarde said the risks to the economy were “more balanced” than in June but that the inflation outlook remained unusually uncertain.
J.P. Morgan pushed its forecast for a 25-basis-point cut to December from October, while Barclays, Morgan Stanley and Wells Fargo reiterated expectations for a quarter-point cut in December.
"We acknowledge the clear risk that the ECB is done with cuts, but also want to recognise that the inflation outlook still implies an easing bias," J.P. Morgan strategists said in a note.
(Reporting by Kanchana Chakravarty in Bengaluru; Editing by Janane Venkatraman and Tasim Zahid)
The ECB held its key rate steady at 2% on Thursday, in line with expectations.
Global brokerages expect the ECB to keep interest rates steady for longer, with some forecasting a potential rate hike in 2026.
Traders are pricing an 84% probability that the central bank holds rates steady until the end of 2025.
J.P. Morgan pushed its forecast for a 25-basis-point cut to December from October.
Lagarde stated that the risks to the economy were 'more balanced' than in June, but the inflation outlook remained unusually uncertain.
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