Despite the ECB’s concerns, investors are largely expecting rate cuts to arrive in the near term due to a belief that the central bank is acting too pessimistic in its inflation outlook. Financial markets are betting that a total of 127 basis points of rate cuts will be introduced throughout the course of the year, with the first being between April and June.

“Our view remains that the weak growth outlook – with activity below potential for many quarters ahead – and falling inflation will mean cuts can happen sooner rather than later,” Peter Goves, at MFS Investment Management commented.

The post European Central Bank Pushes Back Interest Rate Cuts appeared first on theprimarymarket.com.

According to a Bloomberg poll of economists, the European Central Bank (ECB) is expected to implement four interest rate cuts throughout the year. Still, ECB Chief Economist Philip Lane has suggested that analysts are overconfident. Lane stated in an interview published over the weekend that premature rate cuts would be “self-defeating.”

“Today’s data could encourage the ECB to speed up monetary easing but we’re now getting at the stage when bad economic news no longer translates into good news for equity markets,” Benoit Péloille, chief investment officer at Natixis Wealth Management, stated.

The post European Stocks Slip Following Weaker Economic Data appeared first on theprimarymarket.com.

“There’s a high likelihood that after 10 rate increases, we’ve reached the interest-rate plateau,” Nagel stated during an interview. “In my view, it’s much too early to think about when rate cuts might possibly happen.” He added that policymakers would decide during the course of the year when to implement cuts upon reviewing inflation data, adding that inflation remains too high to consider rate cuts at present.

With the ECB only expecting inflation to fall to its 2% target by the second half of 2025, the central bank’s president Christine Lagarde insisted “We should absolutely not lower our guard.” According to the ECB’s latest forecast, inflation is expected to slow from a current level of 6.1% to 2.7% in 2024.

The post Still Early for ECB to Consider Rate Cuts, Official Claims appeared first on theprimarymarket.com.

Among the most anticipated decisions is that of the US Federal Reserve, due on Wednesday. The Fed is widely expected to keep its interest rate constant, at the highest rate in two decades, with rate cuts expected to come into play next year. “There’s no incentive for the Fed to sound too eager to cut rates, lest financial conditions loosen further,” Bloomberg Economics observed.

The European Central Bank is set to deliver its interest rate decision on Thursday, with executive board member Isabel Schnabel claiming that further rate hikes are unlikely. A rate cut is expected to be delivered in April 2024. The Bank of England, which is also set to announce its interest rate decision on Thursday, is expected to hold rates constant for a third straight month.

The post Global Central Bankers Convene to Discuss Final Interest Rate Decisions of 2023 appeared first on theprimarymarket.com.

Set to be published on Thursday, the personal consumption expenditures price index is expected to rise 3.1% in October compared to the previous year. Core inflation is expected to rise by 3.5%. Euro-region data, also due Thursday, is seen to be rising 2.7%—the lowest rise since July 2021. The core measure is expected to slow down to 3.9%.

Despite expectations of a slowdown across the board, officials from both the Federal Reserve and the European Central Bank remain convinced that more evidence is needed in order to convince them that consumer prices are indeed under control.”We’re certainly not declaring victory,” European Central Bank President Christine Lagarde affirmed.

The post Inflation Gauges May Support End of U.S., Eurozone Rate Hikes appeared first on theprimarymarket.com.

While some European governments have expressed concerns about the ECB’s tight fiscal policy reducing economic growth, Lagarde stood by the ECB’s interest rate hiking agenda, explaining that she isn’t worried about the political implications of the policy.

Although the ECB did hit a pause in its rate hikes during its last policy meeting, borrowing costs remain elevated as the bank seeks to further shrink inflation toward the 2% mark. Lagarde affirmed that maintaining price stability is the ECB’s main priority.

The post ECB President Believes Central Bank Will Hit Inflation Target in 2025 appeared first on theprimarymarket.com.

At its last policy meeting in September, the ECB raised its interest rates for the 10th straight month. This saw the deposit rate rise to a record 4%. According the Lagarde, such interest rate levels need to be maintained in order to lower inflation to the ECB’s 2% target.

While the ECB’s tight fiscal policy has slowed economic growth in the region, the ECB president maintained that bringing on a recession was not her intention. Still, she was quick to point out that this is a worldwide trend, adding “That’s why the International Monetary Fund has revised its forecasts lower in the whole world, except for the US.” The IMF is set to release its latest economic projections on Tuesday.

The post ECB President Adamant That Policy Will Lower Inflation appeared first on theprimarymarket.com.

Both Fed Chair Jerome Powell and ECB President Christine Lagarde are set to speak in the upcoming week, with investors expecting them to exhibit optimism about the recent signs that inflation is cooling. The recent figures are expected to play a role in convincing the Federal Reserve to refrain from hiking rates in November. The same policy loosening is expected from the ECB.

“The ECB has probably finished raising interest rates,” Bloomberg Economics assumed. “Numerous measures of underlying price increases are falling, surveys are pointing to a significant deterioration in activity, and credit extension is weaker than it was in the depth of the euro crisis. However, the ECB will still need a long time to have sufficient confidence to lower rates.”

The post Fed and ECB Expected to Show Optimism in Final Stretch of 2023’s Fight Against Inflation appeared first on theprimarymarket.com.

According to Eurostat, consumer inflation across the 20 countries sharing the euro currency was 0.5% month-on-month in August and 5.2% year-on-year. This is lower than the 5.3% year-on-year flash estimate reported on August 31.

Slovak ECB policymaker Peter Kazimir stated on Monday that the ECB’s decision last Thursday to continue raising its interest rates may have been the last for a while. Still, Kazimir warned that ECB policymakers have not ruled out the possibility of further interest rates in their entirety.

In August, expensive services added 2.41 percentage points to the final consumer inflation number, while food, alcohol, and tobacco added another 1.98 percentage points. Industrial goods added 1.19 points.

The post Euro Zone Inflation Revised Down By EU Statistics Office appeared first on theprimarymarket.com.

“The market shouldn’t expect that we would jump too early to cut rates,” Kazaks explained during an interview. “We’ll start cutting rates when we see that we consistently and significantly start to undershoot our target, and what I can say clearly is that expectations of a rate cut in spring or early summer in my view are not really consistent with the macro scenario that we have.”

According to projections that were presented last week, inflation in the eurozone is expected to take another two years to reach 2% as it stands, even if price pressures continue to cool. Having remained stagnant throughout 2023, the Eurozone economy is expected to achieve quarterly growth rates of around 0.4% in 2024.

The post ECB Official Warns That Rate Cuts Unlikely in Early 2024 appeared first on theprimarymarket.com.

Despite the ECB’s concerns, investors are largely expecting rate cuts to arrive in the near term due to a belief that the central bank is acting too pessimistic in its inflation outlook. Financial markets are betting that a total of 127 basis points of rate cuts will be introduced throughout the course of the year, with the first being between April and June.

“Our view remains that the weak growth outlook – with activity below potential for many quarters ahead – and falling inflation will mean cuts can happen sooner rather than later,” Peter Goves, at MFS Investment Management commented.

The post European Central Bank Pushes Back Interest Rate Cuts appeared first on theprimarymarket.com.

According to a Bloomberg poll of economists, the European Central Bank (ECB) is expected to implement four interest rate cuts throughout the year. Still, ECB Chief Economist Philip Lane has suggested that analysts are overconfident. Lane stated in an interview published over the weekend that premature rate cuts would be “self-defeating.”

“Today’s data could encourage the ECB to speed up monetary easing but we’re now getting at the stage when bad economic news no longer translates into good news for equity markets,” Benoit Péloille, chief investment officer at Natixis Wealth Management, stated.

The post European Stocks Slip Following Weaker Economic Data appeared first on theprimarymarket.com.

“There’s a high likelihood that after 10 rate increases, we’ve reached the interest-rate plateau,” Nagel stated during an interview. “In my view, it’s much too early to think about when rate cuts might possibly happen.” He added that policymakers would decide during the course of the year when to implement cuts upon reviewing inflation data, adding that inflation remains too high to consider rate cuts at present.

With the ECB only expecting inflation to fall to its 2% target by the second half of 2025, the central bank’s president Christine Lagarde insisted “We should absolutely not lower our guard.” According to the ECB’s latest forecast, inflation is expected to slow from a current level of 6.1% to 2.7% in 2024.

The post Still Early for ECB to Consider Rate Cuts, Official Claims appeared first on theprimarymarket.com.

Among the most anticipated decisions is that of the US Federal Reserve, due on Wednesday. The Fed is widely expected to keep its interest rate constant, at the highest rate in two decades, with rate cuts expected to come into play next year. “There’s no incentive for the Fed to sound too eager to cut rates, lest financial conditions loosen further,” Bloomberg Economics observed.

The European Central Bank is set to deliver its interest rate decision on Thursday, with executive board member Isabel Schnabel claiming that further rate hikes are unlikely. A rate cut is expected to be delivered in April 2024. The Bank of England, which is also set to announce its interest rate decision on Thursday, is expected to hold rates constant for a third straight month.

The post Global Central Bankers Convene to Discuss Final Interest Rate Decisions of 2023 appeared first on theprimarymarket.com.

Set to be published on Thursday, the personal consumption expenditures price index is expected to rise 3.1% in October compared to the previous year. Core inflation is expected to rise by 3.5%. Euro-region data, also due Thursday, is seen to be rising 2.7%—the lowest rise since July 2021. The core measure is expected to slow down to 3.9%.

Despite expectations of a slowdown across the board, officials from both the Federal Reserve and the European Central Bank remain convinced that more evidence is needed in order to convince them that consumer prices are indeed under control.”We’re certainly not declaring victory,” European Central Bank President Christine Lagarde affirmed.

The post Inflation Gauges May Support End of U.S., Eurozone Rate Hikes appeared first on theprimarymarket.com.

While some European governments have expressed concerns about the ECB’s tight fiscal policy reducing economic growth, Lagarde stood by the ECB’s interest rate hiking agenda, explaining that she isn’t worried about the political implications of the policy.

Although the ECB did hit a pause in its rate hikes during its last policy meeting, borrowing costs remain elevated as the bank seeks to further shrink inflation toward the 2% mark. Lagarde affirmed that maintaining price stability is the ECB’s main priority.

The post ECB President Believes Central Bank Will Hit Inflation Target in 2025 appeared first on theprimarymarket.com.

At its last policy meeting in September, the ECB raised its interest rates for the 10th straight month. This saw the deposit rate rise to a record 4%. According the Lagarde, such interest rate levels need to be maintained in order to lower inflation to the ECB’s 2% target.

While the ECB’s tight fiscal policy has slowed economic growth in the region, the ECB president maintained that bringing on a recession was not her intention. Still, she was quick to point out that this is a worldwide trend, adding “That’s why the International Monetary Fund has revised its forecasts lower in the whole world, except for the US.” The IMF is set to release its latest economic projections on Tuesday.

The post ECB President Adamant That Policy Will Lower Inflation appeared first on theprimarymarket.com.

Both Fed Chair Jerome Powell and ECB President Christine Lagarde are set to speak in the upcoming week, with investors expecting them to exhibit optimism about the recent signs that inflation is cooling. The recent figures are expected to play a role in convincing the Federal Reserve to refrain from hiking rates in November. The same policy loosening is expected from the ECB.

“The ECB has probably finished raising interest rates,” Bloomberg Economics assumed. “Numerous measures of underlying price increases are falling, surveys are pointing to a significant deterioration in activity, and credit extension is weaker than it was in the depth of the euro crisis. However, the ECB will still need a long time to have sufficient confidence to lower rates.”

The post Fed and ECB Expected to Show Optimism in Final Stretch of 2023’s Fight Against Inflation appeared first on theprimarymarket.com.

According to Eurostat, consumer inflation across the 20 countries sharing the euro currency was 0.5% month-on-month in August and 5.2% year-on-year. This is lower than the 5.3% year-on-year flash estimate reported on August 31.

Slovak ECB policymaker Peter Kazimir stated on Monday that the ECB’s decision last Thursday to continue raising its interest rates may have been the last for a while. Still, Kazimir warned that ECB policymakers have not ruled out the possibility of further interest rates in their entirety.

In August, expensive services added 2.41 percentage points to the final consumer inflation number, while food, alcohol, and tobacco added another 1.98 percentage points. Industrial goods added 1.19 points.

The post Euro Zone Inflation Revised Down By EU Statistics Office appeared first on theprimarymarket.com.

“The market shouldn’t expect that we would jump too early to cut rates,” Kazaks explained during an interview. “We’ll start cutting rates when we see that we consistently and significantly start to undershoot our target, and what I can say clearly is that expectations of a rate cut in spring or early summer in my view are not really consistent with the macro scenario that we have.”

According to projections that were presented last week, inflation in the eurozone is expected to take another two years to reach 2% as it stands, even if price pressures continue to cool. Having remained stagnant throughout 2023, the Eurozone economy is expected to achieve quarterly growth rates of around 0.4% in 2024.

The post ECB Official Warns That Rate Cuts Unlikely in Early 2024 appeared first on theprimarymarket.com.