Will the ECB raise rates in 2026? What it means for your cash

This Tuesday, April 29, the European Central Bank is holding the first day of its monetary policy meeting. The decision will be announced tomorrow, April 30, at 2:15 PM CET. For the first time in several months, this meeting carries genuine uncertainty: not about the immediate decision, but about what comes next.

In January 2026, 85% of economists surveyed by Reuters expected rates to remain on hold for the entire year. Today, markets are pricing in one to two 25-basis-point hikes starting in June. In just a few weeks, the baseline scenario has been completely rewritten. Understanding why, and what it means in practice for corporate treasury management, has become urgent for French businesses.

What changed everything: the Middle East energy shock

Behind this reversal, a single catalyst: the escalation of the Middle East conflict and its ripple effects on energy markets. Christine Lagarde warned during a speech in Berlin on April 20 of the scale of the supply shock, estimated at around 13 million barrels per day, roughly 13% of global consumption. The Strait of Hormuz, through which about 20% of the world's oil passes, remains at the center of all uncertainty.

The consequences are already visible in the data published by Eurostat on April 16: annual inflation in the euro area jumped to 2.6% in March 2026, up from 1.9% in February, a 0.7 percentage point spike in a single month. At the same time, the IMF revised down its eurozone growth forecast to 1.1% for 2026, from a previous estimate of 1.4%.

It is this combination of rising inflation and eroding growth that puts the ECB in a particularly difficult position and brutally revives the question of stagflation risk in Europe.

What markets are actually pricing

The Reuters survey published on April 24 leaves no ambiguity about tomorrow's decision: 84 out of 85 economists surveyed expect the deposit rate to stay at 2.00%. But the path forward is far less consensual.

Several Governing Council members have already signaled their stance. Martins Kazaks, Governor of the Central Bank of Latvia, indicated he sees nothing wrong with market expectations pricing in two hikes from June onwards. The IMF, for its part, estimated on April 17 that the ECB should raise its key rate twice this year to combat the energy-driven inflation surge, before reversing course in 2027.

Other voices remain more cautious. Grant Slade, economist at Morningstar, believes markets overreacted to geopolitical tensions and does not rule out a rate cut before year-end if the conflict resolves quickly.

What everyone agrees on: uncertainty is exceptionally high, and the ECB will decide meeting by meeting, with no pre-committed trajectory.

Three possible scenarios, three implications for your treasury

Scenario 1: prolonged hold (rates stable through end of 2026) This is the most favorable scenario for a balanced treasury strategy. The deposit rate stays at 2.00%, money market instruments continue to deliver stable and predictable returns. A two-horizon approach, short-term liquid and medium-term in European corporate bonds, retains its full relevance.

Scenario 2: one or two hikes from June (central market scenario) This is what markets are pricing today. Hikes of 25 basis points in June and/or July would bring the deposit rate to 2.25% or 2.50%. For treasurers, this is actually good news on the short end: daily money market instruments like Smart Overnight adjust mechanically to the higher ECB rate, with no action required.

Scenario 3: hike followed by a cut in 2027 (IMF scenario) The IMF anticipates a temporary tightening this year, followed by an easing in 2027 once the energy shock is absorbed. In this case, locking liquidity into long, inflexible term deposits today could prove suboptimal. Flexibility becomes a key advantage.

In all three scenarios, one constant: inaction is the worst choice. Leaving cash in a non-remunerated current account means absorbing inflation regardless of where rates go.

Why flexibility is worth more than ever

Faced with this uncertainty, the temptation to rush into long, locked-in placements to "secure" a yield is understandable. But it runs against what the situation actually demands.

If rates rise, fixed-rate instruments bought today lose relative attractiveness. If rates then fall, term deposits broken before maturity generate penalties. Liquidity, in this context, is not a weakness in the strategy. It is its backbone.

Solutions like Smart Overnight capture money market returns day by day, adjusting automatically to each ECB rate move. No lock-in, no duration risk, no exit penalty.

For medium-term reserves, the Amundi EUR High Yield Corporate Bond ESG offers exposure to European corporate bonds with higher return potential. In a context of still-attractive rates and well-oriented credit spreads, this horizon remains relevant, as long as operational liquidity is kept separate.

How Velesios simplifies this navigation

In a shifting environment, responsiveness is a condition for performance. Velesios was built for exactly this.

Through the platform, companies and individuals can:

• Access both products in a few clicks, entirely online
• Benefit from execution and custody handled by Interactive Brokers
• Monitor positions and returns in real time
• Reallocate freely between short-term and medium-term as the context evolves

No traditional banking intermediary. No hidden fees. No capital lock-in.

Conclusion

Tomorrow's ECB meeting will probably not be a surprise. But it opens a three-to-six-month window where everything can shift: toward hikes if the energy shock persists, toward a hold if the conflict resolves, toward cuts if growth deteriorates too sharply.

For French companies, navigating this environment without a clear treasury strategy means leaving chance in control. Allocating cash intelligently between immediate availability and medium-term return means taking back control, whatever scenario ultimately plays out.

Sources and references

• ECB, monetary policy decision, March 19, 2026 : ecb.europa.eu
• Banque de France, ECB Economic Bulletin No. 2/2026 : banque-france.fr
• Reuters, economist survey on ECB, April 24, 2026 : reuters.com
• IMF, Alfred Kammer, statement to Reuters, April 17, 2026 : imf.org
• Eurostat, euro area inflation March 2026, April 16, 2026 : ec.europa.eu/eurostat
• France Epargne, ECB April 30, 2026 meeting analysis : france-epargne.fr