Central Banks
ECB Rate-Cut Pushback to Hinge on New Forecasts
- Lagarde may seek to quash market expectations for lower rates
- Officials may also discuss early end to PEPP reinvestments
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After ramping up borrowing costs for more than a year, all eyes will now be on how forcefully the European Central Bank pushes back against bets on interest-rate cuts.
The extent of its resistance will hinge on fresh projections for the euro-zone economy — arriving on the heels of a surprisingly steep slump in inflation. That outlook may also help the ECB decide whether to hasten its exit from quantitative easing by phasing out reinvestments under the €1.7 trillion ($1.8 trillion) pandemic-era PEPP initiative.