Analysts are divided on whether the European Central Bank will cut rates again in October, with some expecting a pause until December.
The European Central Bank (ECB) announced on Thursday expected rate decreaseIt reduced the official deposit interest rate by 25 basis points to 3.5 percent. second reduction of the current cycleFollowing a similar measure in June.
This decision, which was accepted unanimously by the members of the Board of Directors, “One more step to soften the degree of restriction According to the official statement of the ECB, monetary policy
With the economic outlook remaining unchanged compared to June forecasts, Attention turns to next ECB meetingSpeculations are increasing regarding the possibility of a rate cut on October 17.
Analysts from major financial institutions present perspectives about the possible path.
ECB cut interest rates in September: What happens now?
Bill Diviney, head of macroeconomic analysis at ABN Amro
Diviney, ECB keep your options open Regarding another interest rate cut in October.
He stated that ECB President Christine Lagarde did not give a clear indication of future moves in her last press conference, which contradicts previous meetings. downplayed the likelihood of imminent decisions. This suggests: leaves the door open to new segments.
Additionally, the economist highlights several upcoming economic reports: Such as September inflation data and Euro Zone PMI figuresIt could influence the ECB’s next decision. He also emphasizes that “oil prices are significantly lower than expected in September forecasts,” which could lead to a lower inflation forecast.
God wait”New cuts of 25 basis points At each of the October and December meetings if the data is consistent with these expectations.
Carsten Brzeski, ING Group Head of Global Macroeconomics
Brzeski drew attention to dependence on the ECB with a meeting-by-meeting approachA system where decisions depend heavily on data. Recommends making the next cut Not possible in October and on the other hand, “It looks likely to happen in December.”
Brzeski also points out that the ECB may have to make this decision, despite the possibility of “some hesitation”. adopt more aggressive disruptionsbut not until 2025.
add this Wage negotiations in Germany and rising sales price expectations It indicates that inflationary pressures continueIt makes short-term aggressive interest rate cuts unlikely.
He said the central bank’s “track record of anticipating rising inflation” pretty weak“, so he will err on the side of caution before implementing more aggressive measures. Ultimately, he believes the ECB will wait until inflation trends become clear before making more rapid cuts.
Roberto Coco, chief strategist at BBVA Madrid
Coco underlines Lagarde’s confidence in inflation forecasts The ECB expects inflation to reach its 2% target by the end of 2025. This long-term outlook supports further interest rate cuts, but does not foresee a rapid and mechanical reduction at every meeting.
Instead, the analyst said the ECB can take a more flexible approachInterest rate cuts were suspended during some meetings.
It predicts a “moderate pause” in October, followed by another outage in December. The strategist believes this, but More outages likelyThe ECB will not need to follow a rigid path that allows adjustments according to evolving economic conditions.
ADVERTRubén Segura-Cayuela, European economist at Bank of America
Segura-Cayuela confirms that “the bar is high for a rate cut in October” very high“, given the ECB’s lack of clear signals on its next move.
He reiterated that Lagarde was careful not to offer any concrete guidance in her last press conference: The last cut was just a “step” in a broader process.
Despite this, Segura-Cayuela ECB Speed up your cutting cyclealthough not in the near future.
It predicts that the ECB could implement “one rate cut per meeting” until March 2025. decrease in inflationary pressures. However, it is warned that the timing of this acceleration is uncertain and the likelihood of a disruption in October seems low unless there is a serious deterioration in economic data.
ADVERTGoldman Sachs economist Sven Jari Stehn
Stop at Sostiene que”moderate growtha greater advance in core inflation and cooling of wage growth“It will probably lead to a third rate cut of 25 basis points in December.
He hopes the December meeting will take place Including lowering the inflation outlookThis will reinforce the need to continue easing monetary policy.
Economist looking to the future Predicts cascading cuts in 2025Until the rates in July are 2%. His view is in line with the general consensus that the ECB will continue to cut interest rates, albeit gradually, as inflation tends to fall and growth remains moderate.
October is difficult, December is more likely
Although the ECB has taken another step loosening monetary policyThe possibility of further cuts at the October meeting remains unclear.
ADVERTAnalysts are divided and many believe December is the most likely time for the next measureEspecially since updated economic forecasts are expected to show lower inflation.
Key factors such as salary pressuresinflation data and Growth will greatly affect In the ECB’s decision-making process in the coming months
But most agree that the long-term path will continue despite a possible short-term slowdown It’s still a constant reliefMore aggressive cuts are planned until 2025.
