Economists at Nordea continue to see further hikes at least from the ECB, and think financial markets are pricing in too many rate cuts ahead.

Premature peak predictions

“Earlier tightening measures are having a clear impact on financing conditions, banking worries in the US continue, but at the same time, inflation numbers remain way too high. There are clearly risks both ways, but we think at least the ECB will hike rates several times further, and do not see rates falling as rapidly as being priced in by financial markets.”

“Lagarde was clear that the ECB is not pausing, and we look for two further 25 bps rate hikes, in June and July, bringing the deposit rate to 3.75%.”