abrdn: ECB final interest rate will be 2% in 2025

abrdn: ECB final interest rate will be 2% in 2025

10 december 2024

Rente ECB
Rente (04) inflatie

Felix Feather, Economist at abrdn, looks ahead to next Thursday's ECB meeting:

'The ECB will almost certainly cut rates for the third consecutive time when it meets on Thursday.

We will be watching for updates to the ECB’s inflation and growth forecasts, both of which could be revised down.

Lagarde will be asked about the impact of President Elect Donald Trump’s policies’ impact on Eurozone economic prospects. We think trade uncertainty will underscore the ECB’s urgency in bringing rates back into neutral territory.

Markets are currently pricing 6 cuts over the next 12 months, which would take policy settings into outright accommodative territory. Lagarde probably won’t take a view on market pricing, but she might stress the ECB’s expectations of a soft landing for the Eurozone economy, which would weaken the case for such a deep cutting cycle.

We expect the ECB to continue to deliver 25bps cuts at every meeting to April next year, taking the deposit rate to 2.25%, before cutting again later in the year to reach a terminal rate of 2.0%.'

Gerelateerde berichten