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Published on Thursday, April 11, 2024

Europe | Setting the stage for rate cuts

Summary

All in all, while waiting for wage data that underpin the expected slowdown in service prices, the ECB heads to the June meeting leaving the stage set to begin the cycle of cuts, regardless of the Fed's monetary policy steps.

Key points

  • Key points:
  • The ECB kept interest rates on hold for the 5th meeting in a row, as expected.
  • For the first time, they mention they consider appropriate to reduce the current level of monetary policy restriction if inflation continues to move toward its target.
  • The institution asserted its data-driven mode, independent from the Fed's rate decisions.
  • The latest inflation data aligns with the ECB's forecasts. Yet, they will closely monitor wages and their impact on services prices.

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Documents and files

Report (PDF)

ECB-Watch-0424.pdf

English - April 11, 2024

Authors

CC
Carlos Castellano BBVA Research - Economist
PL
Pedro Lomo Menéndez BBVA Research
MM
María Martínez BBVA Research - Principal Economist
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