Economists See Final ECB Rate Hike Next Week

Summary

Bloomberg's Jana Randow discusses expectations for the ECB's September meeting, with economists seeing a final quarter-point hike to a 2.5% deposit rate and then a hold through 2027. She notes the data-dependent ECB is concerned about energy-driven inflation, though core and services price pressures have eased. The euro-area economy remains resilient enough to withstand somewhat higher rates.

• Markets see a September ECB hike as nearly certain.
• Bloomberg survey economists expect the deposit rate to peak at 2.5% and stay through 2027.
• The survey path is more dovish than current market pricing.
• Some Governing Council members worry December may also be live because of energy prices.
• Core and services inflation eased, suggesting energy is the main inflation driver.
• Middle East escalation adds uncertainty to energy prices.
• Euro-area growth and confidence indicators remain resilient.