Ecb Rate Cuts Are Coming Soon

 Ecb Rate Cuts Are Coming Soon

Ecb Rate Cuts Are Coming Soon

Peter Kazimir, a member of the governing council, has recently commented on the issue of inflation and interest rate cuts. According to him, all the factors point to a slowdown in inflation.

However, he added that the first rate cut will likely have to wait till June 2024. At last week's meeting, the ECB kept the rates at record highs with no change at all. However, the comments and the market's forecast suggest that it is only a few months away.

2% Inflation Target Of Ecb

According to ECB's Christine Lagarde, the members have already started to discuss the policy easing. She added that a lot more inflation will become available in June 2024, which means there's a high chance of rate cuts that month.

She commented on how the ECB will have access to more information in April. However, it will only be in June 2024 when they will have all the data needed to warrant a rate cut.

For now, the current stream of data clearly shows that the best course of action for the ECB is to stay calm till June (summer).

If we look at the markets, they are looking forward to around 4 rate cuts in the year 2024. As for the first rate cut, it will likely happen in June but that could change depending on the data.

According to sources, most of the ECB members are actually in favor of a rate cut in June. Meanwhile, some members are also discussing the idea of a rate cut in July, but they are still a minority.

Overall, the bigger picture suggests that the ground is being set for a rate cut in summer 2024. After all, Kazimir's comments have also hinted at gradual confidence-building regarding rate cuts.

At the end of the day, the ECB's decision to cut rates in June will depend entirely on the inflation staying consistently below or close to the 2% target.

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