ECB Policy Dilemma: Markets Price 55 Bps as Energy Shock Tests Lagarde’s Resolve

Key TakeawaysMoney markets are now pricing in 54-55 basis points of interest rate hikes for the remainder of 2026, a sharp hawkish shift following the European Central Bank’s (ECB) latest policy meeting.ECB President Christine Lagarde faces a critical decision on whether to validate this aggressive tightening path or signal that the bank will "look through" the current energy price spike.Inflation projections for 2026 have been revised upward to 2.6%, driven primarily by a surge in Brent crude to $120 per b ...