ECB Review: Hike to Wait and See

Research evidence excerpt

ECB Review: Hike to Wait and See

Idea

June 11, 2026 07:27 PM GMT

Morgan Stanley Europe S.E.+MECB Review | Europe Jens Eisenschmidt

Chief Europe Economist

Hike to Wait and See Jens.Eisenschmidt@morganstanley.comJean-Francois Ouvrard +49 69-21662817

Deputy Chief European Economist

Jean-Francois.Ouvrard@morganstanley.com +49 69-21662813

The ECB delivered the anticipated 25bp rate hike. Today's Morgan Stanley & Co. International plc+

communication gave further support to our call for a gradual Chiara Zangarelli

approach to tightening. We expect a final rate hike in September. EconomistChiara.Zangarelli@morganstanley.com +44 20 7677-3644

Monetary Policy| Gradual Path Ahead: The ECB delivered the expected rate hike Morgan Stanley Europe S.E.+

today, addressing increasing inflation pressures. Statement language and the press Gabriela Silova

Economist

conference suggest to us that a decision to tighten policy further is not imminent, Gabriela.Silova@morganstanley.com +49 69-21662832

provided the inflation outlook does not deteriorate significantly. Limited data to

Morgan Stanley & Co. International plc+

inform such a reassessment imply a pause at the July meeting as very likely. Instead, Skander Garchi Casal

we continue to expect a final rate hike in September, on the basis of our expected oil Economist

Skander.Garchi.Casal@morganstanley.com +44 20 7425-0034

price path. If instead oil prices fall significantly from here, the ECB would likely stay

on hold from here. The ECB's newly added "mild" scenario caters exactly to that Morgan Stanley Europe S.E.+

Claire A Thuerwaechter

possibility.

Claire.Thuerwaechter@morganstanley.com +49 69-21662842

Macroeconomic Projections | Details Matter: The June projections were broadly in