Fidelity: ECB holds, but September cut wide open

Fidelity: ECB holds, but September cut wide open

19 juli 2024

ECB
Rente (04) inflatie

Commenting on today’s ECB decision, Salman Ahmed, Global Head of Macro and Strategic Asset Allocation at Fidelity International, said:

'The ECB meeting unfolded as expected, with no changes made to policy rates and limited forward guidance. The statement and the press conference were fairly balanced, which reiterated the data-dependent stance of the ECB. President Lagarde pointed out the elevated domestic price pressures and wages as reasons for keeping rates unchanged. However, she also downplayed the recent pickup in inflation as one offs and overall wage pressures as broadly in line with their expectations.

Meanwhile, downside risks to growth, particularly due to the slow recovery in the industrial sector and weak credit dynamics affecting investment demand for firms, build the case for the ECB to remove some degree of restrictiveness. This puts the focus back on the data flow over the summer months and a September cut is very much in play. We will have two more months of data on inflation and the labour, which should open the path ‘wide open’ for cuts, in the absence of any further upside surprise.'

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