Group 1 - The core viewpoint is that over 60% of economists believe the European Central Bank (ECB) will raise interest rates next, a significant shift from one-third in October, as inflation stabilizes around 2% [2] - Economists predict that the next adjustment in ECB rates will be an increase, aligning with the views of influential hawkish executive Isabel Schnabel [2] - Despite the expectation of a rate hike, it is anticipated that deposit rates will remain at 2% until December 18 and throughout the next two years [2] Group 2 - Analysts are revising their forecasts due to the unexpected resilience of the Eurozone economy against global trade pressures and geopolitical turmoil, aided by substantial government spending [2] - Both Paul Hollingsworth and Jan von Gerich predict that the ECB will implement two rate hikes of 25 basis points each in September and December 2027 [3] - Respondents expect the ECB's upcoming quarterly forecast to present a more optimistic growth outlook, as hinted by ECB President Christine Lagarde [3] Group 3 - Concerns about inflation in 2027 persist, particularly regarding the delayed implementation of the EU's new carbon pricing system, although inflation is expected to rise by 1.9% that year [4] - Nearly two-thirds of analysts are more worried about exceeding the ECB's mid-term inflation target rather than falling short, indicating a balanced view on inflation risks [4] - Dennis Shen from Scope Economics suggests that the ECB should consider current interest rates appropriate due to relatively balanced inflation risks, with no expected rate cuts until 2026 [4] Group 4 - The chief economist of Sweden's bank, Nerijus Maciulis, anticipates another rate cut by the ECB in March next year, citing a fragile foundation for growth prospects [5] - Approximately 45% of respondents believe that economic growth is primarily constrained by structural factors beyond the ECB's control, such as manufacturing downturns and high energy costs [5] - Carsten Brzeski from ING argues that monetary policy cannot address structural growth issues, predicting that officials will remain patient and refrain from further rate cuts until at least 2027 [5]

Group 1 - Economists predict that the European Central Bank (ECB) is likely to raise interest rates, aligning with the views of influential committee member Isabel Schnabel, as inflation stabilizes around 2% [1][5] - A survey indicates that over 60% of respondents believe officials are more likely to increase rather than decrease borrowing costs, a significant shift from October when only one-third held this view [1] - Analysts are revising their forecasts due to the resilience of the Eurozone economy amid global trade tensions and geopolitical turmoil, with expectations for the first rate hike potentially occurring in the second half of 2027 [5][8] Group 2 - The ECB's current interest rates are viewed as appropriate, with most committee members stating that rates are at a "suitable level" [5] - Predictions suggest that the ECB will raise rates by 25 basis points in September and December 2027, although tighter financing conditions could pose headwinds to the economy [5][11] - Concerns remain regarding inflation in 2027, particularly with the delayed implementation of a new carbon pricing system in the EU, although most economists expect the ECB's inflation forecast for that year to remain at 1.9% [8][10] Group 3 - Approximately 45% of survey respondents believe that economic growth is primarily constrained by structural forces beyond the ECB's control, such as increased competition from China and high energy costs [14] - The ECB is expected to maintain its current stance until at least 2027, as monetary policy alone cannot address structural growth issues [14] - The impact of U.S. policies, both monetary and trade-related, is viewed as a significant threat to the Eurozone economy, alongside ongoing concerns regarding the Russia-Ukraine conflict [11][14]

Core Viewpoint - The European Central Bank (ECB) Executive Board member Schnabel supports investor bets on the next interest rate hike by the ECB, indicating that borrowing costs are at an appropriate level unless new shocks occur [1] Group 1: Economic Outlook - Schnabel noted that consumer spending, corporate investment, and significant government spending on defense and infrastructure will continue to boost the economy [1] - Economic and inflation risks are tilted to the upside, suggesting a potential upward revision in economic growth forecasts during the December meeting [1] Group 2: Interest Rate Policy - Analysts expect the deposit rate to remain at 2% for the fourth consecutive time [1] - Schnabel is the first ECB policymaker to explicitly state that borrowing costs have reached not just an "appropriate level" but the lower limit [1]

Core Viewpoint - Deutsche Bank believes that the European Central Bank (ECB) has ended its easing cycle and will next move towards raising interest rates, expected to occur by the end of 2026 [1] Summary by Relevant Sections - **Current Monetary Policy Stance** - Deutsche Bank previously anticipated that the ECB would lower interest rates again in September, with a terminal rate forecast of 1.50% compared to the current rate of 2% [1] - The risk of the ECB's easing cycle stopping at 1.75% or even 2.00% was acknowledged by Deutsche Bank [1] - **Future Outlook** - The next action from the ECB is expected to be an interest rate hike, projected to take place by the end of 2026 [1]

Group 1 - Franklin Templeton predicts that the European Central Bank (ECB) may consider raising interest rates by the end of the year due to increased defense spending potentially boosting the economy [2] - David Zahn, head of European fixed income at Franklin Templeton, believes that by 2026, Europe will show low inflation and strong growth, suggesting a shift in ECB policy towards rate hikes [2] - Current market expectations lean towards three more rate cuts by the ECB this year, each by 25 basis points, maintaining the deposit rate at 1.5% until mid-next year [2][3] Group 2 - The Dutch central bank president, Knot, indicates that the upcoming ECB meeting in June will be complex, with potential downward revisions to inflation forecasts [3] - Zahn expects the ECB deposit rate to bottom out between 1.75% and 1.5% by September, leading to a more optimistic outlook for the economy [3] - The focus is shifting back to the economic boost from European defense plans, with Germany initiating significant debt financing for defense and infrastructure spending [3] Group 3 - Franklin Templeton's European total return fund has returned approximately 3.6% over the past year, compared to a benchmark return of 6.5% [4] - The company has reduced its exposure to Spain, France, and Italy, anticipating widening yield spreads between their 10-year bonds and German bonds [3][4] - The outlook for the UK is negative, with all UK government bond positions sold off due to severe fiscal conditions, leading to rising long-term borrowing costs [4][5]

Core Viewpoint - Franklin Templeton suggests that the European Central Bank (ECB) will consider interest rate hikes by the end of this year due to potential economic growth driven by defense spending [1] Group 1: Economic Outlook - David Zahn, head of the European fixed income department, indicates that by 2026, the economic situation in Europe will be very clear, with low inflation rates and strong economic growth [1] - This perspective contrasts with current market expectations, where traders anticipate three more rate cuts from the ECB this year, each by 25 basis points [1] Group 2: Interest Rate Projections - Traders expect the deposit rate to remain at 1.5% until mid-next year following the anticipated rate cuts [1]