According to a Reuters poll cited by FXStreet, a significant majority of economists now anticipate that the European Central Bank (ECB) will raise its deposit rate to 2.25% at its June 11 meeting. Specifically, 74 out of 80 economists surveyed expect this rate hike, a notable increase from 59 out of 70 economists in the May survey, indicating a growing consensus for tighter monetary policy as inflation risks persist [1].
The poll also reveals that expectations for further tightening have become more hawkish, with 49 out of 80 economists now forecasting two additional rate hikes in 2026, compared to 34 out of 70 in the previous poll [1]. This shift in sentiment is driven by ongoing concerns about stagflation, as 28 out of 42 economists surveyed believe the risk of stagflation—defined as weak economic growth alongside persistent inflation—remains high for the year [1]. Such a scenario could further complicate the ECB's monetary policy decisions in the coming months.
Despite these expectations, the market reaction has been muted. The Euro responded modestly to the Reuters poll, with EUR/USD trading around 1.1620 on Wednesday, down 0.11% on the day. This suggests that investors had already largely priced in the anticipated June rate hike, and the survey has not significantly altered the broader market outlook for ECB policy [1].
CONCLUSION
The Reuters poll underscores a strong consensus among economists for a June ECB rate hike, reflecting persistent inflation and stagflation risks. However, market reaction has been limited, as expectations for tighter policy were already largely priced in. The ECB faces a challenging environment as it navigates potential stagflation and further rate decisions.