The European Central Bank Expected to Cut Rates Amid Economic Weakness - Goldman Sachs and JPMorgan Forecasts Revealed
Major brokerages like Goldman Sachs and JPMorgan are now predicting that the European Central Bank will deliver a quarter-point cut at its upcoming meeting on October 17. This decision comes in response to recent data showing economic weakness and slowing inflation in the Euro zone.
Market pricing currently indicates a 90% chance of a rate cut, following reductions at the ECB's June and September meetings. The focus is shifting towards growth rather than price pressures, as Euro zone inflation dropped below 2% for the first time since mid-2021 in September. Surveys also revealed a sharp contraction in Euro zone business activity, with the services industry stagnating and manufacturing facing a downturn.
ECB policy doves are preparing to push for an October rate cut, despite potential resistance from more conservative peers. This marks a shift from the sentiment after the September meeting, when an October move was deemed unlikely.
Various brokerages have shared their rate cut estimates and forecasts, with Goldman Sachs, HSBC, BNP Paribas, JPMorgan, and others providing insights into their predictions for the coming years.
In conclusion, the expected rate cut by the ECB reflects a response to economic challenges in the Euro zone. This decision can have implications for investors, businesses, and consumers, as it may impact borrowing costs, investment decisions, and overall economic growth in the region. Stay tuned for updates on this developing situation as it unfolds.
