Unresolved But Better Than Feared: The ECB's Next Scenario Analysis

The ECB is expected to refresh its macroeconomic scenarios for energy prices and conflict duration at the June 11 meeting. Current market conditions for energy are better than previously feared, suggesting a middle-ground scenario between baseline and adverse outlooks.

Key Takeaways

• 1.Energy price developments have been more favorable than the ECB's 'adverse' or 'severe' scenarios projected in March.
• 2.The ECB is expected to update its macroeconomic scenario analysis at the June 11 rate decision, likely positioning the current environment between its previous baseline and adverse scenarios.
• 3.SEB forecasts a 25 basis point rate hike by the ECB.

Table of Contents

• Unresolved but better than feared: The ECB's next scenario analysis
• Starting position not as bad as feared
• Baseline scenario virtually unchanged
• New scenarios at the June decision