Central Banks
ECB Defends Rate-Cutting Path in Face of Traders Paring Bets
- Markets see fewer moves amid inflation pickup, Trump threats
- Policymakers reiterate pledge to base decisions on data
This article is for subscribers only.
The European Central Bank is pushing back against investors who reckon firmer inflation, a surprisingly sturdy US jobs market and Donald Trump’s economic disruption will narrow the scope to lower interest rates.
While markets have pared bets on the number of cuts they expect this year from the ECB — and the Federal Reserve — officials in Frankfurt are unperturbed. Governing Council members like Francois Villeroy de Galhau and Yannis Stournaras have reiterated long-held beliefs that the deposit rate will fall to about 2% by mid-2025, from 3% today.