Aberdeen: More ECB interest rate cuts on the horizon
The outlook from Felix Feather, economist at asset manager Aberdeen, on the upcoming ECB meeting. According to Feather, we can expect another rate cut by September, following the one he believes will be announced this Thursday.
“The ECB is set to cut rates again on Thursday amid weak growth and slower inflation.
We expect rates will sit at a neutral-looking 2.0% after the Governing Council’s decision is announced.
This move probably won’t be the last cut of the cycle, as policymakers will likely have to provide the economy with further support once the full effects of changes to US tariff policy have been felt.
Cheaper oil, a stronger euro, and looser labour markets will keep inflation muted over the short term even if the EU retaliates against the US with increased tariff measures of its own. We therefore expect a further rate cut by September, taking rates into outright accommodative territory.”
