11:00 - 26.06.2026

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June 26, Fineko/abc.az. Following geopolitical breakthroughs and stabilizing adjustments in international energy corridors, several leading macroeconomists have systematically revised downward their projections for further European Central Bank (ECB) interest rate hikes.

According to ABC.AZ, Oxford Economics released an operational brief indicating that following this month’s monetary tightening—the first rate hike logged since 2023—it no longer anticipates consecutive restrictive steps from the central bank. Oliver Rakau, Chief Germany Economist at the firm, stated that weakening aggregate demand combined with softening labor market metrics diminishes the risk of second-round inflationary effects, allowing the regulator to pause its hawkish stance. Concurrently, Capital Economics shifted its baseline to a "one-and-done" scenario, while institutions like Nomura and RBC Capital Markets scaled back the total number of projected rate adjustments.

Market Pricing and Official European Central Bank Commentary:

• Market Disclosures: Despite institutional analytical adjustments, global financial markets continue to fully price in a final 25-basis-point (quarter-point) rate increase before the end of the year.

• Executive Board Stance: ECB Executive Board member Isabel Schnabel argued that from today’s macroeconomic perspective, additional measures remain fundamentally necessary to pull inflation—currently tracking at 3.2%—back down to the medium-term 2% price stability mandate. She welcomed the diplomatic progress but noted that restoring crude and natural gas supply lines to pre-war operational baselines would be a lengthy process.

• Updated Banking Trajectory: RBC Capital Markets strategists expect one final rate hike in September. Nomura still forecasts two additional hikes (scheduled for September and December) but has completely removed a third increase previously penciled in for March 2027.

The shifts follow recent notes from ECB President Christine Lagarde, who verified that the central bank remains structurally ready to alter its policy trajectory based on the evolution of global economic shocks, adding that current data fails to display evidence demanding a harsher policy response.