Online reports and institutional surveys show that analysts surveyed expect the European Central Bank to cut interest rates twice this year and no longer expect the bank's interest rate to be lower than 2%. Monthly surveys show that after six interest rates so far, the ECB is still likely to cut interest rates continuously in April and June. But unlike in the previous round of surveys, respondents expected the deposit rate (currently 2.5%) to remain at 2% until the end of the survey period. In mid-February, a slim majority had expected an eventual reduction in interest rates to 1.75% in March 2026. European governments plan to significantly increase defense investment, which could boost flagging economic growth and fuel inflation. In addition to military spending, Germany plans to add hundreds of billions of euros in additional spending to renovate its aging infrastructure. Marco Wagner, an economist at Deutsche Bank, said the spending "will add to inflationary pressures by the end of 2026." (Jin Shi)