Martin Van Vliet – Global Macro Strategist of Robeco – recalled that, at its meeting on 11 April 2024, the Governing Council of the ECB kept rates unchanged, while confirming its intention to cut rates in June. The strategist added that Christine Lagarde said there will be “much more information” available in June that could boost confidence in inflation moving towards target.
Nonetheless, the expert explains, while clearly opening the door to a rate cut in June, Lagarde abstained from make a premature commitment to that decision or to a “particular rate path”. In other words, explains Martin Van Vliet, monetary policy remains dependent on data.
“With rates above the neutrality threshold and inflationary pressures gradually decreasing, there seems to be room for a rate cut by the ECB,” the expert hypothesized, pointing out however that the rate path remains data-dependent and the speed of rate adjustment will, to some extent, be influenced by the decisions of its counterparts.
As a central scenario, the expert expects that the ECB cuts rates by 25 basis points in June, followed by similar measures in September and December. “A cut in June is not yet a given and in the coming quarters we see little room for larger or more frequent cuts,” specifies Martin Van Vliet: after September, in fact, in his opinion there could be more room for further interventions.
The expert concludes by stating that, if you look beyond the current year, you see room for continued monetary easing, with interest rates still above the neutral level by some margin.
This writing is written for informational purposes only, can be modified at any time and cannot be considered a solicitation for public savings. The website does not guarantee the correctness and does not assume responsibility for the use of the information contained therein.
