(Bloomberg) — Economists at Morgan Stanley raised their forecast for the European Central Bank’s key interest rate to 4% because core inflation is likely to peak later and higher than previously expected.
(Bloomberg) — Economists at Morgan Stanley raised their forecast for the European Central Bank’s key interest rate to 4% because core inflation is likely to peak later and higher than previously expected.
The bank increased its forecast for the so-called terminal rate from 3.25% previously, according to a research note. The ECB is set to increase its key rate by 50 basis points at each of the next two meetings before slowing to 25 basis-point pace after that.
“A much later peak in core inflation is the catalyst for more ECB hikes in the months ahead,” economists led by Jens Eisenschmidt said in the note. “Our new inflation path sees the ECB being confronted with rising core inflation at the May meeting.”
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.