A Reuters poll found that 84 of 85 economists expect the European Central Bank to keep its deposit rate at 2% at the April meeting. This points to broad agreement on no near-term change.
For later meetings, 44 of 85 economists now expect a rise to 2.25% as early as June. In late March, 38 of 60 economists expected no change through 2026.
Further out, 50 of 85 economists expect at least one rate rise this year, up from 21 of 60 in the prior poll. This shows a move towards expecting tighter policy than before.
The survey links these shifts to uncertainty about the euro area inflation outlook. It suggests the ECB may hold rates soon while allowing for later changes if inflation stays elevated.
A consensus is forming that the European Central Bank will hold its deposit rate steady at its next meeting. However, this apparent calm is misleading as the ground is shifting beneath the market. With recent Eurostat data showing headline inflation holding at a stubborn 2.6% in March 2026, the pressure on the ECB is building.
We see a clear repricing of future interest rate hikes, which presents an opportunity. The ESTR forward market is now pricing in a greater than 70% probability of a rate hike by the July 2026 meeting, a significant jump from just a few weeks ago. This means that while a hold is expected now, the market is quickly anticipating a more hawkish turn very soon.
For traders, this growing uncertainty suggests that options on short-term interest rates are becoming more attractive. Implied volatility on Euribor futures is likely to rise as the debate between a hold and a hike intensifies. Buying options allows for a defined-risk way to position for a surprise move from the central bank in the coming months.
Positions that bet on higher rates further out the curve should be considered. This could involve selling Euribor futures contracts for the later part of 2026 or entering into pay-fixed interest rate swaps. The trend is clearly shifting away from the dovish stance we saw throughout most of 2025.
We only need to look back to the 2022 tightening cycle to remember how quickly sentiment can pivot. The market was slow to react then, and those who positioned early for higher rates were rewarded. We appear to be in the early stages of a similar dynamic today as economists rapidly adjust their forecasts.
This rapid shift in expectations reflects the persistent inflationary pressures that the ECB can no longer ignore. Any hawkish language in the upcoming press conference could accelerate this repricing, validating positions that anticipate tighter monetary policy.
