Traders Turbocharge ECB Bets by Predicting 2.5% Rate in 2024
- Traders are betting on high chance of a cut as early as March
- BlackRock, Goldman warn such wagers are over extended globally
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Investors are betting that Europe will lead the world’s largest central banks on interest-rate cuts after one of the region’s most hawkish policymakers described a slowdown in inflation as “encouraging.”
Markets are fully pricing six quarter-point rate cuts by the European Central Bank in 2024 for the first time, a move that would take the key rate down 150 basis points to 2.5%. There’s also an almost 90% chance of the easing cycle starting in the first quarter of next year, a scenario that was barely contemplated just three weeks ago.