Goldman Sachs AM: Possible faster easing cycle to lower terminal rate

Goldman Sachs AM: Possible faster easing cycle to lower terminal rate

12 september 2024

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Gurpreet Garewal, Macro Strategist Global Fixed Income, Goldman Sachs Asset Management comments on today’s ECB interest rate decision:

'Today's 0.25% cut in policy rates by the ECB was widely expected by market participants. With limited economic data expected by October's meeting, we do not foresee another cut until December, unless there is a significant deterioration in regional or global growth.

Looking further ahead, a faster easing cycle towards a lower terminal rate could occur earlier than current market pricing suggests. Over the summer, tourism, sporting events, and concerts boosted activity and inflation in the services sector, but both are expected to cool as the seasons change. Slowing wage growth has the potential to slow services inflation, which combined with growing downside growth risks, may prompt ECB officials to accelerate the pace of normalisation in 2025, compared to the quarterly pace adopted in 2024.'

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