There European Central Bank is prepared this week for another Tax cuts from 25 basic pointsconsidering that inflation under expectations compensately compensates for the prospects of economic growth. The cut that will be announced on Thursday It could also be the last of the ANOr, since rates are now close to the level of neutrality and the main purpose of the ECB returns to the ability to ensure price stability, compatibly with an inflation close to the medium -long period of 2%.
But what are the Analysts’ expectations For this and for the next Eurotower meetings? Are they all agreed in believing that this will be the last cut? And how will it behave after the ECB?
Inflation under the long -term target
The inflation data, published this morning by Eurostat, are coming, which confirm one Prices growth below targets long -term 2%. In May 2025, in fact, consumer prices were substantially unchanged, after the growth of 0.6% recorded in April. The annual inflation stood at 1.9% from 2.2% of the previous month, also resulting in less than 2% of the Consensus. Data that support another cut dies of 25 basis points, but also promise an arrival point, on the level of neutrality identified between 1.75% and 2.25%. Currently the rate on deposits is already 2.25%.
More gossip, less anxiety for cuts
Experts of Ing identify a signal of BC relaxationAnd on the monetary policy front: the gossip on the exit of lagarde from the ECB and the European issues of large flow rate are receiving more attention than the decisions of the rates, an evident sign that the European Central Bank must be on the right path and that the cutting of the rates of 25 base points is a decision already taken to be made to be made official. Actually, The outcome of the meeting is not so obvious and is not excluded within the board a more heated debate between hawks and doves. The arguments of the latter in favor of another cut Ratorms would understand the loss of inflationary pressures, the appreciation of the euro, the correction of the price of oil. Who is against To a cut of the rates or at least to a postponement of a cut in July, focus on the resilience of the European economy, entrusting the weakness of some indicators to the persistent uncertainty and the continuous pull and give up on the duties. Attention also to the press conference on Thursday, which could prove to be more interesting than usualnot only for questions about the history of WEF and on the personal ambitions of Lagarde, but also for the clues about what could happen in the future.
Rates: Cycle of cuts not yet at the terminus
Despite the reference rate of the ECB has already reached the upper limit of the neutral corridor between 1.75% and 2.25% calculated by the same ECB, Generali Investment “still does not see the end of the cycle of cuts”. “In April, President Lagarde announced several scenarios on the impact of the commercial war. We think they will be an important ingredient for the Board of Directors on how to navigate through the commercial war. -Subonean Martin Wolburg, Senior Economist of General Investments -. Recent comments show that the discussion on further political actions within the Board of Directors has increased, but we expect that we expect The balance of the risks of the commercial war subjects in favor of further loosening. We foresee another 25 -basis cut on June 5th. While we continue to wait for a final cut at 1.75%, Mrs. Lagarde should emphasize the dependence on data and deliberately leave the timing of the final cut open “.
Word in Lagarde!
Also experts on eToro They focus on a 25 -point cut on Thursday. But the real game is played on communicationAnd. “Christine Lagarde will move on the edge of the razor: with a still resistant core inflation, but a weak activity and growing political pressure – explains Gabriel Debach, Etoro’s market analyst – the market will seek indications clear on a possible path of additional cuts. In the meantime, the data continue to flow: industrial production in Germany and France, French commercial balance, Italian retail sales. Data that will say a lot about the state of health of the European economy “.
