ECB Unlikely to Cut Interest Rates Until June, Says Bank of America
Analysts at Bank of America predict no interest rate changes at upcoming ECB meeting, anticipate potential action in June.
The European Central Bank is not expected to make any significant changes to its policy or rhetoric at its upcoming January meeting, according to analysts at Bank of America Securities. In a note to clients, the analysts stated that they believe ECB policymakers will not consider lowering interest rates from their current record highs until June. They also suggested that signs of increasing disinflation in the eurozone could prompt "faster action" thereafter. The analysts expressed their view that market pricing is excessive, barring any unforeseen new shocks.
This analysis follows ECB President Christine Lagarde's recent statement that price growth in the eurozone is projected to decrease to the bank's 2% target. However, Lagarde cautioned that it is premature to declare victory over inflation. While she did not push back against expectations of six rate cuts in 2024, Lagarde indicated that interest rates may start to decrease in the summer, contrary to the market's anticipation of reductions in the spring. Her remarks further dampened hopes for imminent cuts from central banks in the eurozone, U.K., and U.S.
The European Central Bank is not expected to make any major changes to its policy or rhetoric at its January meeting, and the possibility of interest rate cuts is not likely until June, according to analysts at Bank of America Securities.
ECB Unlikely to Cut Interest Rates Until June, Says Bank of America
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