Nordea Predicts Four ECB Rate Hikes in 2026, Defying Market Pricing

Nordea analysts now forecast four 25bp ECB hikes in 2026, lifting the deposit rate to 3.5% by mid-year. The call follows hawkish June 1-2 remarks from Schnabel and Rehn that flagged persistent Iran-war inflation and framed a June move as possible insurance. Elderson’s June 3 warning of deteriorated risks and Fed Chair Warsh’s potential scrapping of the dot plot added further uncertainty. Markets currently price only a 40% chance of one 25bp hike by September, setting up major repricing in EUR/USD and eurozone yields if Nordea’s view gains traction.