The Rabobank analysts consider it likely that the European Central Bank (ECB) will raise the official interest rate by 50 basis points in Decemberbut they do not completely rule out the possibility of a 75 basis point rise.
We maintain our forecast of a terminal rate of 3%
“Despite a first easing of headline inflation, core inflation remains elevated and will slow inflation convergence towards the target. The new expert projections will include a forecast for 2025, but given the recent forecast errors, the ECB should err on the side of caution as long as upside risks to inflation persist.”
“A slower rate path does not mean a lower terminal rate. Getting this message across will be a key challenge for Chairwoman Lagarde. Details on QT could steal her spotlight.”
“We maintain our forecast of a terminal rate of 3%. For this reason, we have expanded our monetary policy expectations with a last rise of 25 basis points in April. We could see quantitative tightening at a monthly rate of €25-30bn, and we have anticipated a start date in the second quarter.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
