The European Central Bank’s (ECB) decision on interest rate cuts continues to spark debate among investors and economists. Despite official guidance that leans towards “gradual” quarter-point cuts, markets are fixated on the possibility of a half-point reduction in rates.
Key inflation metrics below 2% have contributed to this speculation. The weak economy also plays a significant role in fueling expectations for more substantial rate cuts. A majority of experts and market participants still believe that smaller quarter-point reductions will be the norm, but traders remain open to the possibility of a half-point cut at one of the next three ECB meetings.
Source: https://www.bloomberg.com/news/articles/2024-12-09