The ECB is almost certain to cut rates by 25 bps next week. While the central bank will refrain from giving firm guidance on future steps, we believe staff forecasts showing inflation at the medium-term target support a quarterly pace of rate cuts, Nordea economists Jan von Gerich and Tuuli Koivu note.
ECB set to announce another 25bp rate cut
“The ECB is set to announce another 25bp rate cut, and we expect the communication to be in line with our view of continued quarterly rate cuts. Clear signals on the timing of the next policy steps should not be expected.”
“The staff inflation forecast for the near term is likely to see minor upward revisions, while the medium-term figures point to inflation stabilising around the two percent target. Financial markets could see somewhat muted moves on any dovish comments from Lagarde.”
Source: Fx Street
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