European Central Bank must consider weaker growth in June decision, says Guindos

Luis de Guindos, the outgoing vice president of the European Central Bank, just threw cold water on expectations for a June rate hike. In an interview published May 11, he made clear that the ECB cannot ignore the eurozone’s deteriorating growth picture when it meets on June 10-11.

The numbers tell a grim story

Eurozone inflation hit 3% in April 2026. That’s a sharp jump from 1.9% just two months earlier in February, driven in part by geopolitical tensions in the Middle East that have pushed energy costs higher.

The euro area economy grew just 0.1% in the first quarter of 2026.

Guindos was unusually blunt about what comes next. He said “the impact on growth is going to become much more visible over the coming weeks” and that incoming data “are not going to be good.”

Context: from cutting to contemplating hikes

To understand how the ECB got here, rewind to 2025. The bank spent much of last year cutting rates, implementing multiple 25-basis-point reductions. One of those cuts, on June 5, 2025, brought the deposit facility rate down to 2.00%.

Then the inflation picture shifted. Middle East geopolitical flare-ups sent energy prices climbing, and suddenly that 1.9% February inflation reading started looking like a fond memory. By April, with inflation at 3%, the conversation pivoted sharply from “how much more should we cut” to “do we need to start hiking.”

Investors adjusted quickly. The probability of a June rate hike climbed in futures markets, with traders betting the ECB would prioritize its inflation mandate over growth concerns. Guindos is now pushing back against that narrative, or at least urging patience.

His emphasis on waiting for the ECB’s updated projections in June is significant. Those projections will incorporate the latest data on growth, inflation, employment, and trade.

What this means for crypto investors

If the ECB holds off on hiking rates due to growth concerns, that’s generally supportive for risk assets including Bitcoin. Low rates make traditional savings and bonds less attractive, pushing capital toward higher-return investments. The easing cycle of 2025 was, not coincidentally, a tailwind for crypto markets.

But if inflation keeps climbing and the ECB is eventually forced into aggressive hikes anyway, just later and faster than markets expect, the resulting volatility could hit crypto hard.

What’s worth watching between now and June 10: the next round of eurozone GDP revisions, any ECB board member speeches that echo or contradict Guindos, and whether inflation data for May shows the April spike was a blip or a trend.

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