fxs_header_sponsor_anchor

News

ECB to cut policy rates at each and every meeting from June onwards – ABN Amro

Nick Kounis, Head of Financial Markets and Sustainability Research at ABN Amro, notes that the European Central Bank (ECB) President asserted that while the Governing Council would be ‘data dependent’ it was ‘not Fed dependent.’

ECB will cut policy rates at each and every meeting from June on wards

"Overall, we think the ECB’s communication is consistent with a start of a rate cut cycle at the June Governing Council meeting. A large majority of officials seemed to be minded to support a June rate cut and the ‘few’ that did not thought that the data already justified a decision at this meeting. Looking further forward, the ECB would not pre-commit ‘to a particular rate path’ but would ‘follow a data-dependent and meeting-by-meeting approach’."

"Our own base case is that the ECB will cut policy rates at each and every meeting from June onwards. We take the view that interest rates are currently deeply in restrictive territory. Estimates of the neutral rate are half or less than the current level of the deposit rate. Given that the eurozone economy has been stagnating for more than a year, the only justification for restrictive monetary policy has been above-target inflation. However, the inflation picture is changing fast. Even assuming 125bp of rate cuts this year, monetary policy would still be restrictive at the end of 2024."

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.


RELATED CONTENT

Loading ...



Copyright © 2024 FOREXSTREET S.L., All rights reserved.