Citi Forecasts Two ECB Hikes Amid Hormuz Uncertainty

Citi forecasts two ECB quarter-point hikes in June and July, citing Hormuz disruption and hawkish signals, but no April hike.
Citi cut 2026 euro‑area GDP forecast to 0.9% from 1.3% and raised headline inflation outlook to 2.9% from 1.8%.
Economists warn the Hormuz shipping uncertainty makes rate‑path uncertain, with a low cost of delay but risk of premature hikes.
Expected medium‑term European fiscal expansion on defence, energy and technology could keep rates higher longer, reducing reversal likelihood.