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2025-12-18 09:08:56
[ECB Expected to Hold Rates Steady on Thursday; Economic Resilience May Prompt It to Close the Door to Rate Cuts] 1. Markets widely expect the European Central Bank (ECB) to keep interest rates unchanged at its meeting on Thursday, sending a clear signal that it is not considering rate cuts in the near term. This policy is driven by the resilience of the Eurozone economy amid global trade shocks and stable inflation levels close to the ECB's target. 2. Latest data shows that Eurozone economic growth is slightly better than the ECB's expectations, mainly due to the effective response of the export sector to US tariffs and domestic spending in Germany offsetting manufacturing weakness. Meanwhile, driven by rising service sector prices, inflation has remained near the ECB's 2% target. Analysts believe the ECB may raise its economic growth and inflation forecasts at this meeting, which would essentially signify the end of its easing cycle. 3. Although some market traders have begun betting on future rate hikes, and comments from some ECB officials have fueled speculation, most analysts believe it is too early to discuss rate hikes, as there is still a large amount of spare capacity in the manufacturing sector. Economists predict the ECB will maintain stable interest rates in 2026 and 2027. A stable labor market, service sector expansion, and Germany’s fiscal stimulus package will continue to fuel the eurozone economy in the coming months.
