Europe | The direction is clear: more cuts to come

Summary

The ECB adopted a relatively dovish stance today while implementing the widely expected rate cut, signaling the possibility of further reductions without committing to a specific terminal level. This approach aligns with the continued progress in disinflation and the subdued momentum of the Eurozone economy.

Key points

• Key points:
• ECB cuts rates by 25bps (depo rate to 2.75%), reinforcing the easing cycle
• Rates remain in restrictive territory, neutral rate discussion remains premature
• The macroeconomic outlook and the balance of risks remain unchanged

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