Report: ECB Highly Likely to Cut Rates by 25 Basis Points Next Week
According to a report by Ulrike Kastens, an economist at German asset management firm DWS, the European Central Bank (ECB) is expected to lower its deposit rate by 25 basis points to 3.00% next Thursday, rather than opting for a larger cut of 50 basis points. While the eurozone’s economic outlook has deteriorated and inflation prospects have improved more than anticipated, these factors are not sufficient to prompt a more aggressive rate reduction.
Data from LSEG indicates that the money market currently assigns an 87% probability to a 25 basis point rate cut, compared to a 13% probability for a 50 basis point cut.
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