Europe | Easing path on track

As expected, today the ECB lowered interest rates by 25bp and revised down growth and inflation forecasts. Lagarde did not give many clues on the next steps but reaffirmed that the disinflationary process is on track. We maintain four more cuts for the first half of 2025 to 2% (depo).

Key points

• Key points:
• The ECB reduced rates by 25 basis points and removed its pledge to keep rates restrictive for as long as necessary
• As expected, growth and inflation forecasts were revised down, with a loss of momentum in activity and with balanced risks in inflation
• Lagarde did not provide many clues on future rates, or where the neutral rate is, but we expect four more rate cuts down to 2% for the depo rate

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