Economists No Longer Expect ECB Rates to Reach 4% After Turmoil

Economists predict the European Central Bank will stop raising interest rates before they reach 4% — a scenario that was widely expected and priced in by investors until just a week ago.

The change in outlook comes after the collapse of Silicon Valley Bank in the US and troubles at Credit Suisse Group AG threw markets in a tailspin, raising the specter of a fresh financial crisis. The ECB on Thursday followed through on plans to raise borrowing costs by another 50 basis points though didn’t offer any guidance on the future policy path.