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ECB Watch: Quarterly cuts it is
The ECB cut the deposit rate by 25bp, thus confirming the quarterly pace of cuts. We think this pace will be maintained, and still see the deposit rate at 2.25% at the end of next year. Financial markets are pricing in faster and steeper cuts. • The ECB cut the deposit rate by 25bp, in line with expectations, and repeated the central bank remains in a data-dependent mode and a meeting-by-meeting setup. • The quarterly pace for 25bp cuts has been set, and we expect this pace to be maintained until rates hit 2.25% by the end of 2025. • Staff growth and inflation forecasts were left almost unchanged. • Financial ... (full story)