Crypto & Forex March 13, 2026 0 Comments

ECB’s Next Move Hangs by a Thread: What Middle East Turmoil Means for Your Investments—Get Ahead Now!

So, here we are again—on the brink of an ECB meeting that could very well redefine the economic game for the Eurozone. But hold up, what happens when the war in Iran collides head-on with soaring energy prices? You guessed it—a fresh stagflation shock that’s got even the sharpest minds at Rabobank scratching their heads. Now, here’s the kicker: despite these mounting pressures, the ECB looks set to keep the deposit rate frozen at 2.00%, probably riding out the waves through 2026. Yet, don’t be fooled into complacency—if this Middle Eastern turmoil drags on, inflation risks might force the ECB’s hand sooner than we think, with hikes lurking just around the corner. Christine Lagarde’s about to walk a tightrope, balancing hawkish signals without triggering a market frenzy—can she pull it off? Buckle up, because the coming months could rewrite the rules of monetary policy in a way that few saw coming. LEARN MORE

Rabobank’s Senior Macro Strategist Bas van Geffen previews the upcoming ECB meeting, stressing that the war in Iran and higher energy prices create a new stagflation shock for the Eurozone. They expect the ECB to leave the deposit rate at 2.00% and likely stay on hold through 2026, while warning that prolonged conflict would raise inflation risks and could eventually force rate hikes.

ECB seen on hold but turning more hawkish

“The policy outlook is now inextricably tied to the situation in the Middle East, making for a very bifurcated outlook.”

“The war in Iran, and surge in energy prices, creates a new stagflation shock. We fully expect the ECB to prioritise inflation risks, but any policy response can probably be more measured than a couple of years ago. For now, the inflation outlook does not require rate hikes, but the longer the conflict lasts, the bigger the inflationary risks become.”

“The ECB can assess the situation and will probably take no action next week.”

“We expect Lagarde to lean on the hawkish side, but perhaps less so than the market is priced for.”

“We still see the ECB on hold through 2026. However, if the situation in energy markets deteriorates significantly, we expect the ECB to hike at the first subsequent policy meeting.”

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)