Analysts: Iran War Prompts Market Expectations for European Central Bank's Next Move to Be Rate Hike

CycleProphet · 2026-03-18T09:56:17+00:00

Middle East tensions have increased the likelihood of ECB rate hikes. Analysts point out that surging inflation in the eurozone makes the central bank vigilant against second-round effects, with President Lagarde expected to emphasize the need to control inflation at the meeting. Investors anticipate that interest rates will be raised by approximately 36 basis points by year-end.

CycleProphet

2026-03-18 09:56:17

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Deep Tide TechFlow News, March 18 — According to Jin10 Data, Ebury analyst Matthew Ryan stated that conflicts in the Middle East are increasing the likelihood that the European Central Bank (ECB) will raise interest rates rather than cut them at its next meeting. The ECB typically overlooks the impact of supply shocks, but recent inflation spikes in the Eurozone following the Russia-Ukraine conflict may make it more cautious of secondary effects. Even before the outbreak of war, data including negotiations for significant wage increases indicated this trend. At Thursday’s meeting, ECB President Christine Lagarde is likely to say that the ECB will not allow a dangerous surge in inflation. LSEG data shows that investors expect Eurozone interest rates to rise by about 36 basis points by the end of the year.

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