ECB: We no longer expect any further ECB rate cuts – Wells Fargo
According to analysts at Wells Fargo, the European Central Bank (ECB) will likely hold interest rates steady unless the economic data worsen materially.
“We have for several months been expecting an additional interest rate cut from the European Central Bank (ECB), first calling for one at the December meeting and then punting to the March meeting after the growth and inflation data in the Eurozone showed signs of stabilizing. Since then, economic data have generally been resilient, and ECB policymakers have sounded more upbeat about the outlook as a result.”
“As a result of stabilizing activity and inflation data and more constructive comments from a range of policymakers, we no longer expect any further ECB rate cuts for the foreseeable future, and expect policymakers to strike a fairly upbeat tone at this week’s policy announcement.
“We still think ECB easing is possible, but the key difference now is that the ECB will likely hold rates steady unless the data worsen materially, whereas previously the central bank appeared to be leaning toward easing unless the data showed signs of improvement. Thus, we will be calibrating our ECB view carefully in the coming weeks and months, and could revert back to an ECB rate cut if the data worsen.”