Traders Pare ECB Rate Bets to Below Quarter-Point Hike in 2026

Traders are now less convinced that the European Central Bank (ECB) will need to raise interest rates beyond a small increment in 2026, as lower oil prices ease concerns about persistent inflation. This shift in expectations suggests a more stable economic outlook for the eurozone, which could influence consumer spending and business investment decisions. The change in market sentiment underscores the ECB's sensitivity to global economic conditions, particularly energy costs.