ECB Prepares for Three More Rate Hikes Amid Persistent Inflation

Financial markets are bracing for three more interest rate hikes from the European Central Bank (ECB) as inflation persists in the euro zone. According to Nordea, a leading Nordic financial group, this will likely happen despite signs of economic slowdown.

The ECB has already raised rates by 375 basis points since July 2022, bringing the deposit rate to 3.25%. Core inflation remains elevated due to strong wage growth and services demand, prompting the central bank to consider further tightening.

Investors are reassessing the likelihood of additional hikes, with some analysts echoing Nordea's view while others remain skeptical about the ECB's ability to act aggressively in light of weakening growth indicators.