Morgan Stanley: Adjusts Expectations for ECB Rate Hikes, 50 Basis Points Each in June and September

CycleProphet · 2026-03-23T07:28:29+00:00

Morgan Stanley has adjusted its rate hike forecast for the European Central Bank, expecting rate increases of 50 basis points each in June and September 2026, and has withdrawn its rate hike expectations for 2027. The market currently anticipates three rate hikes this year, with the 10-year German government bond yield forecast at 2.80% by the end of 2026.

CycleProphet

2026-03-23 07:28:29

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Deep Tide TechFlow News, March 23 — According to Jin10 Data, Morgan Stanley’s interest rate strategists Luca Salford and Maria Chiara Russo stated in a report that the ongoing Middle East conflict, limited observability of buffers, and preliminary analysis of central banks’ response to stagflation have prompted them to adjust Morgan Stanley’s forecasts for central banks. Morgan Stanley now expects the European Central Bank to raise interest rates by 50 basis points in June and September 2026, and to withdraw the rate hike expectations for 2027. According to LSEG data, financial markets currently expect the ECB to raise rates three times this year. These strategists also predict that under their baseline scenario of the ECB interest rate path, the 10-year German government bond yield will be 2.80% by the end of 2026 and 2.70% in 2027.

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