Konstantin Veit
The degree to which growth in Europe slows, along with inflation developments, will be key in determining the path ahead for the European Central Bank.
The European Central Bank will likely continue to cut interest rates, but future decisions could be more contentious.
Despite still elevated domestic inflation, weak growth and inflation projected at target this year strengthen the case for further rate cuts.
We continue to agree with market pricing following the ECB’s latest rate cut, but see additional downside risks to growth post-U.S. election.
Even without new staff projections, the European Central Bank makes policy less restrictive and lowers its relevant rate to 3.25%.
While the European Central Bank did not precommit, the next cut is likely to be in December.
While the European Central Bank kept policy rates unchanged, the next cut is likely to be delivered soon.
While the European Central Bank cut policy rates by 25 basis points to 3.75% on its deposit facility, the trajectory beyond June remains unclear.
While the European Central Bank refrained from declaring victory at its April meeting, a June rate cut seems increasingly likely.
While market pricing looks more reasonable, European Central Bank rate cuts, which could commence in June, are unlikely to be delivered as aggressively as the market expects in 2024.
While interest rates have presumably peaked, we remain skeptical that rate cuts will be delivered as forcefully as the market expects.
While the ECB is unlikely to raise rates further, we remain skeptical that it will deliver rate cuts as early as the market expects.