What to expect from the European Central Bank: Rate cuts and inflation predictions

Expectations of what’s to come from the European Central Bank next week and into 2024 via the most recent poll of analysts by Reuters.

  • All 90 economists in the poll said the deposit rate would stay at 4.0% at the European Central Bank meeting on December 14

Expectations further out:

  • eurozone economy to enter a short and shallow winter recession
  • 51 of 90 predict at least one
    rate cut sometime before the July ECB meeting
  • medians show a 25 basis point cut in each quarter of next
    year starting Q2, which compares with market pricing is for around 150 basis points of cuts starting in March
  • these predicted 75 basis points worth of
    cuts from the ECB is less than that expected from the Fed (according to an earlier survey by Reuters for Fed expectations)
  • Headline inflation predicted to decline over the coming
    quarters but still remain above the ECB’s 2% target until at
    least 2025

This article was written by Eamonn Sheridan at www.forexlive.com. Source