The revised call comes as we are also starting to see ECB policymakers preach more patience rather than taking a more proactive step come later this month. Goldman Sachs had previously forecast the ECB to raise key interest rates in April and June but have now pushed back that timeline by just a little bit.
The firm now expects the central bank to deliver on those rate hikes in June and September instead. On the call, they note that:
“We expect energy prices to remain persistently high through 2026. A significant passthrough into inflation is likely in the coming months and the ECB’s communication has remained largely hawkish on the path ahead.”
As mentioned earlier, traders are just pricing in ~20% odds of a rate hike for the April meeting for now. But come the June meeting, those odds jump up by quite a margin to ~81% at the moment. For this year, traders are pricing in ~56 bps of rate hikes by the ECB currently.
