Nick Kounis, Head of Financial Markets and Sustainability Research at ABN Amro, notes that the European Central Bank (ECB) President asserted that while the Governing Council would be ‘data dependent’ it was ‘not Fed dependent.
Nick Kounis, Head of Financial Markets and Sustainability Research at ABN Amro, notes that the European Central Bank President asserted that while the Governing Council would be ‘data dependent’ it was ‘not Fed dependent.’ ECB will cut policy rates at each and every meeting from June on wards Overall, we think the ECB ’s communication is consistent with a start of a rate cut cycle at the June Governing Council meeting.
Looking further forward, the ECB would not pre-commit ‘to a particular rate path’ but would ‘follow a data-dependent and meeting-by-meeting approach’. Our own base case is that the ECB will cut policy rates at each and every meeting from June onwards. We take the view that interest rates are currently deeply in restrictive territory. Estimates of the neutral rate are half or less than the current level of the deposit rate.
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