JPMorgan lifts ECB ‘terminal’ rate forecast to 3.25% from 2.50%

People are seen inside a JPMorgan Chase Wealth Management branch in Manhattan, New York City

LONDON (Reuters) – Investment bank JPMorgan ramped up its forecast on Thursday for how high euro zone interest rates will go to 3.25% from 2.50%, after the European Central Bank vowed to keep raising them at a meeting earlier.

“Today’s ECB meeting marked an abrupt hawkish shift, even if some aspects feel odd,” JPMorgan’s analyst Greg Fuzesi said in a note. “We therefore make a huge adjustment to our terminal rate, raising it 75 basis points to 3.25%”.

ECB President Christine Lagarde had said at the central bank’s post-meeting news conference that “interest rates will still have to rise significantly at a steady pace to reach levels that are sufficiently restrictive”.

(Reporting by Marc Jones; editing by Rodrigo Campos)

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