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MarketScape · 03.11.24

ECB Sees Inflation Progress, but June Rate Cut Most Likely

The European Central Bank has revised down its inflation forecasts, but it’s not ready to cut rates just yet. We explain why a mid-year cut looks most likely.
  • Markets & Economy
  • Cash Insights
  • Central Banks
  • ECB
Key Points
What it is
We analyze the European Central Bank’s decision last week to leave its policy rate unchanged, and what investors can expect.
Why it matters
As inflation has softened, investors are expecting central banks to start cutting interest rates this year.
Where it's going
The ECB said it needs more economic data to feel confident about cutting rates. We expect they will wait unit at least June.
Main Point

Close but Not Yet

The European Central Bank acknowledges good progress on inflation’s decline toward its 2% target. However, they said they are not sufficiently confident to begin cutting interest rates, as they seek more evidence. We expect the bank to have enough information make its first rate cut in June.

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