Asset Management Giant Capital Group Bets ECB Will Raise Rates in 2026, Contrasting with Mainstream View

K-LinePoet · 2026-03-12T22:11:48+00:00

Capital Group, an asset management company, expects the European Central Bank to raise interest rates at least once this year, pushing the euro-to-dollar exchange rate to the higher end of the 1.20 range, despite market consensus that rates will remain unchanged. This expectation diverges from the views of investors and economists.

K-LinePoet

2026-03-12 22:11:48

Abstract generation in progress

Capital Group, an asset management firm with a total asset management scale of $3.3 trillion, stated that the European Central Bank will raise interest rates at least once this year, which will significantly boost the euro against the US dollar. This view contradicts the expectations of many investors and economists who believe the ECB will keep interest rates unchanged until 2027. Some even predict that if the Federal Reserve, under its new chair, lowers interest rates and forces the ECB to act, the ECB might ease its policy. Currently, the money market assigns less than a one-in-three chance of a 25 basis point rate cut. However, Edward Harrold, Chief Investment Officer of Capital Group, expects European economic growth to accelerate, leading to a divergence in policy paths between the ECB and the Federal Reserve. In an interview, he said this would push the euro to reach the high end of the 1.20 range by the end of the year. The euro against the dollar was around 1.1860 on Friday. (Sina Finance)

View Original

This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.