Deutsche Bank on Tuesday became the latest brokerage to withdraw its forecast for further interest rate cuts by the European Central Bank, while betting the next policy move to be a hike at the end of 2026 following a tariff deal between the U.S. and EU.

Last week, Goldman Sachs and BNP Paribas (OTC:BNPQY) scrapped their forecasts for rate cuts this year. HSBC reiterated that the central bank is done cutting rates.

BNP expects the ECB to deliver a rate hike in the fourth quarter of 2026.

The European Union and the U.S. sealed a trade deal on Sunday, imposing a 15% tariff on most EU goods — half the threatened rate and averting a major transatlantic trade war.

“With a deal having now been reached, trade policy is less of a reason for the ECB to cut policy rates further,” analysts at Deutsche Bank said in a note. “Further easing is now a risk scenario.”

The ECB held rates steady at 2% last week and offered a modestly upbeat assessment of the euro zone economy, raising doubts among investors about further policy easing. The central bank has cut its policy rate eight times since June 2024.

Other major brokers, including Morgan Stanley and UBS, have also flagged uncertainty around a September rate cut.

Money market traders are pricing in 14 basis points of easing by year-end, implying around a 55% chance of a quarter-point rate cut. They then price a small chance of a rate hike by September 2026, according to data compiled by LSEG.