Inflationary Pressures Drive Morgan Stanley's Revised Forecast
"Following material revisions to our inflation forecast, we now expect the ECB's terminal rate at 4%," the bank wrote in a research note. The move follows similar revisions by other leading investment banks, including JP Morgan and Deutsche Bank, driven by the recent rise in underlying inflation across the 20-nation eurozone.
ECB Governing Council Member Supports Potential 4% Rate Hike
On Friday, ECB governing council member and Belgian national bank governor Pierre Wunsch stated that the ECB might consider raising its key interest rate to 4% if underlying inflation in the eurozone remains persistently high.