Expectations for consecutive ECB rate cuts strengthen: Watch April and June

The European Central Bank is expected to continue its interest rate cuts. According to analysts, as US President Donald Trump’s import tariffs leave the Eurozone facing the risk of recession, it is almost certain that the ECB will lower interest rates next week and in June to support the economy.

According to a report by the Financial Times, investors and economists are pricing in an approximately 90 percent probability that the ECB will cut interest rates at its meeting on April 17.

This rate was at the 70 percent level before the US announced its new customs tariffs at the end of March.

"HAS BECOME INEVITABLE"

Frederic Ducrozet, head of macroeconomic research at Pictet Wealth Management, stated, “A 25 basis point cut in April would be the seventh consecutive rate cut for the ECB. Another cut in June has now become almost inevitable. A contrary scenario would create a serious shock for the market.”

According to Ducrozet, the real issue is whether the ECB will be forced to take more aggressive steps if the economic outlook worsens further. He commented, “The possibility of a deepening recession could force the ECB into larger-scale interest rate cuts and perhaps new monetary easing measures.”

At a time when growth in the Eurozone is losing momentum and geopolitical risks are increasing, the roadmap the central bank will draw is being closely followed by the markets.

News Source: 12punto