Investors have increased bets that interest rates in the euro zone could rise next year even as the US continues to lower borrowing costs, in a shift that could further weigh on an already weak dollar. Swap markets pricing now implies that the European Central Bank (ECB) is more likely to increase rates in 2026 than cut them. Interest rates are currently lower in the euro zone and several other major economies than in the US — partly because of their slower growth. “Central banks around the world are gradually becoming more hawkish.”Bloomberg on Monday reported remarks from ECB board member Isabel Schnabel that she was “rather comfortable” with investor bets on a euro zone rate increase next year. The central bank has come under sustained pressure from President Donald Trump to lower borrowing costs.

Source: The Irish Times December 09, 2025 15:40 UTC