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MNI ECB WATCH: Future Rate Path In Focus After June Cut

MNI looks ahead to this week's ECB Governing Council meeting.

The European Central Bank is set to cut key interest rates 25 basis points to 3.75% on Thursday, its first reduction since 2019, and issue projections broadly confirming the outlook seen in March, with market focus on hints of additional cuts amid an uncertain environment.

The Governing Council will stress that it is persisting with its meeting-by-meeting and data dependent-approach, eschewing clear guidance on its future rate path, particularly given elevated uncertainty over geopolitics and U.S. monetary policy, but President Christine Lagarde could indicate that more easing is likely by the September meeting, in an echo of the signalling leading up to this week’s impending cut. (See MNI SOURCES: ECB To Hold In July, Signal Likely September Cut)

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The European Central Bank is set to cut key interest rates 25 basis points to 3.75% on Thursday, its first reduction since 2019, and issue projections broadly confirming the outlook seen in March, with market focus on hints of additional cuts amid an uncertain environment.

The Governing Council will stress that it is persisting with its meeting-by-meeting and data dependent-approach, eschewing clear guidance on its future rate path, particularly given elevated uncertainty over geopolitics and U.S. monetary policy, but President Christine Lagarde could indicate that more easing is likely by the September meeting, in an echo of the signalling leading up to this week’s impending cut. (See MNI SOURCES: ECB To Hold In July, Signal Likely September Cut)

Keep reading...Show less