Fidelity: ECB will push down interest rates harder and faster than the market is currently pricing in

Fidelity: ECB will push down interest rates harder and faster than the market is currently pricing in

27 oktober 2023

Rente ECB
Rente (kalhh, Pixabay)

Salman Ahmed, Global Head of Macro and Strategic Asset Allocation at Fidelity International, in response to the ECB's interest rate decision:

'We believe President Lagarde found it difficult to break from the existing Council consensus without the cover of new staff forecasts. Ultimately though, while we believe this newfound concern on growth outcomes is likely to presage a more definitive dovish turn at the next meeting, as President Lagarde herself admitted, transmission has already been very strong, and there is still more to come.

Taken together then, we remain of the view that the ECB has over tightened and expect the Euro area to fall into recession this quarter or next. As a result, we expect the ECB to begin cutting rates sooner and more aggressively than current market pricing.'

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