MNI ECB Preview-December 2024: Back-to-Back Cuts Continue

EXECUTIVE SUMMARY: Back-To-Back Cuts Continue

• The ECB will cut by 25bp, marking the third back-to-back cut, and the fourth reduction this year.
• Given that the ECB has previously shown some flexibility in following its self-prescribed data dependent and meeting-by-meeting approach, future meetings carry some degree of uncertainty over policy outcomes. This time around, the prospect of a 50bp cut, although appearing unlikely, cannot be entirely discounted.
• Although all the pieces of the inflation puzzle are still not in place, back-to-back easing against a backdrop of weak economic activity and headline inflation close to target, suggests that language concerning the ‘restrictive’ policy stance is becoming redundant. Even if it is not removed from the policy statement this time around, it soon will be.

FOR THE FULL PUBLICATION PLEASE USE THE FOLLOWING LINK:  ECB Preview December 2024.pdf