Institution: The European Central Bank is expected to hold steady after the anticipated rate hike in September.

Franklin Templeton's European fixed income manager David Zahn stated in a report that the basic forecast of the institution is that the European Central Bank will conduct its final rate hike in September, with inflation expected to remain above the ECB's 2% target in the coming quarters. After that, it is expected that the ECB will pause to assess the impact of the implemented tightening policies. However, Zahn said that the ECB still heavily relies on economic data. "If tensions in the Gulf region reignite and push up energy prices, leading to inflation staying above target levels for a longer period, policymakers may be forced to consider further rate hikes." Franklin Templeton predicts that the ECB will start to loosen its policies in 2027. The ECB raised rates by 25 basis points in June, and it is expected to hold steady this week.