Traders Eye ECB Key Rate at 2.5% as They Ramp Up Bets on Cuts
- Markets briefly priced six quarter-point rate cuts in 2024
- Region’s policymakers are encouraged by inflation slowdown
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Traders are ramping up bets on monetary easing from the European Central Bank next year, raising the stakes for President Christine Lagarde as she prepares for a policy meeting next week.
Markets fully priced six quarter-point rate cuts by the European Central Bank in 2024 earlier on Wednesday, a move that would take the key rate to 2.5%. Although bets were pared slightly later in the day, Deutsche Bank helped stoke the dovish sentiment by revising its outlook to also forecast 150 basis points of cuts.