Analysts from leading European firms are wondering how many interest rate cuts the ECB has left this year.
Financial analysts believe that the objective of the European Bank is bring interest rates to neutral levels as quickly as possible. In fact, there is a consensus in maintaining that “as long as there are no signs of a significant recovery of the euro zone economy or of an inflationary rebound, the ECB will continue to cut rates“.
This is what the experts think INGwho maintain that the explanation of the ECB authorities is still “very unsound” so it seems that the entity “He hasn’t decided yet what he’s going to do next.“. Analysts, however, foresee a weaker trajectory for the economy than estimated by the ECB. “If we are right, this means he will continue to cut rates”they assure.
“The persistent growth weakness and a further slowdown in services inflation will likely prompt the ECB to soften its stance” and “unless there is a significant upside surprise in core inflation or economic sentiment surveys (unlikely in our view), the ECB seems willing to reduce rates“, they agree.
From Danske Bank question how long we should expect the ECB’s policy stance to remain restrictive given “weak economic activity and the disinflationary process underway”. They predict that the ECB will reduce rates to 2%.
For its part, in Berenberg wait two final cuts of 25 basis points to bring the rate to a minimum of 2.5%.
“Due to moderate growth until at least spring 2025 and amid easing wage pressures, headline and core inflation will likely approach 2% over the course of 2025. However, this will not be maintained in 2026 and 2027“, they explain.
Source: Ambito
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