Steady economic outlook brings end to ECB rate cuts, economists say: Reuters poll By Indradip Ghosh BENGALURU (Reuters) -The European Central Bank is done cutting interest rates as a steady economic outlook and near-target inflation put the central bank in a comfortable place, according to a majority of economists polled by Reuters. Economists were divided last month on the possibility of further rate reductions, but recent data have shifted sentiment. Inflation remains close to the ECB’s 2% target, the economy continues to show resilience, and unemployment is at a record low. That is in contrast with the U.S. Federal Reserve, which is weighing the risk of higher inflation against a weakening labour market while also facing serious questions regarding its independence. Several ECB Governing Council members, including President Christine Lagarde, expressed concerns over the eroding of Fed independence, but that was unlikely to affect the euro zone central bank’s policymaking, at least for now. A strong majority of economists - 66 of 69 - in the September 1-4 Reuters poll predicted the ECB, which cut its deposit rate by a total of 200 basis points between June 2024 and June 2025, would hold the rate at 2% on September 11 for a second straight meeting. That was in line with market pricing, but in contrast to expectations of a 25-basis-point Fed rate cut this month. "The ECB is done now and they’re just going to be sitting here for a while...there’s just no pressure to ease at this point," said Claus Vistesen, chief euro zone economist at Pantheon Macroeconomics. 3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads. "Inflation is now around target and unemployment is still at a record low. That’s a soft landing. In that kind of environment, it’s completely natural for the central bank to take the opportunity to lean back and wait it out." Nearly 60% of economists, 40 of 69, predicted the ECB would hold its rates this year, while a slight majority - 33 of 58 - saw the rate at 2% or higher by end-2026. Inflation rose slightly in August to 2.1% but remains close to the ECB’s target. Poll medians suggested inflation would hover around that level until at least 2028. The bloc’s economy is projected to grow 1.2% this year and 1.1% next year, before accelerating to 1.4% in 2027, largely unchanged since June. Hopes of upcoming fiscal support, particularly from Germany, underpin this view. "I don’t think there’s currently anything major hanging over Europe’s head that would bring it down...The region does have a really good opportunity to continue growing into 2026 and beyond and actually do a much better job," said Julie Ioffe, European economist and macro strategist at TD Securities. "But there are enough risks we should be cognizant of and keep an eye on." Germany, the largest economy in the region, contracted 0.3% last quarter on slowing demand from its top trading partner, the U.S. The EU and the U.S. struck a framework trade deal in late July, but only the baseline tariff of 15% has so far been implemented. 3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads. (Other stories from the Reuters global economic poll) Which stock should you buy in your very next trade? AI computing powers are changing the stock market. Investing.com's ProPicks AI includes dozens of winning stock portfolios chosen by our advanced AI. Year to date, 3 out of 4 global portfolios are beating their benchmark indexes, with 98% in the green. Our flagship Tech Titans strategy doubled the S&P 500 within 18 months, including notable winners like Super Micro Computer (+185%) and AppLovin (+157%). Which stock will be the next to soar?

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ECB likely to wait until September to ease rates again - Capital Economics Investing.com - The European Central Bank is expected to wait until September to cut its key policy rate again as officials eye ongoing trade uncertainty and the recent appreciation of the euro, according to analysts at Capital Economics. In June, the ECB slashed borrowing costs for the eighth time in a year, bringing its key deposit rate down by 25 basis points to 2.0%, although policymakers did not provide outright guidance for changes later this year. In a statement, the ECB said its latest decision to lower rates came as the euro area economy faces waning inflation but persistent uncertainty around the impact of global trade tensions. The cut was widely anticipated by markets, meaning that much of the debate among analysts heading into the announcement swirled around the central bank’s plans for rates over the rest of the year. Given an easing in inflation back down to the ECB’s 2% target, some investors have bet that policymakers will push pause on the rate-reduction cycle in July and potentially roll out one more drawdown before the end of 2025. But, writing in a note to clients, the Capital Economics analysts led by Franziska Palmas argued that the ECB is "much more likely to wait until September to ease policy further." The comment comes as murkiness surrounds U.S. President Donald Trump’s tariff plans, with a pause to his sweeping "reciprocal" tariffs is due to expire on on July 9. The White House has previously targeted the European Union -- which includes several euro zone countries -- with these levies, hitting out at the bloc for perceived unfair trade practices. European trade officials met with their Trump administration counterparts in Washington this week. But a trade agreement has yet to be reached, with the EU pushing for a deal "in principle" that would include immediate tariff relief for key sectors. Media reports have suggested that a pact could see the European Commission -- the chief trade negotiator for the EU -- accept a baseline 10% U.S. tariff in exchange for reduced duties on those industries. Yet some in Brussels are calling on the EU to take a stronger stance and insist on a reduction to the 10% levy rate. The ECB warned that the uncertainty may weigh on business investment and exports in the short term, although medium-term growth is tipped to be bolstered by increased government spending on defense and infrastructure. "We think the most likely outcomes are an extension of talks or a quite vague preliminary deal," the Capital Economics analysts predicted. Along with the ongoing trade negotiations, some ECB insiders have also become more concerned over a steep jump in the euro against the U.S. dollar this year, according to the Financial Times. Bolstered by a shift by investors into European assets earlier this year during a time of increased U.S. policy uncertainty, the euro has surged by almost 14% so far this year. The ECB may need to signal that too much strengthening in the euro could be issue, as it might lead inflation to hover below targets, the paper reported, quoting a senior European central banker. A stronger euro can pull down price gains and make imports cheaper, but also dent make exported products more expensive abroad and weigh on overall economic activity. Coupled with signs of tepid growth in the eurozone, along with possible headwinds from U.S. tariffs, some central bankers have become uneasy, the FT reported. Earlier this week, ECB Vice President Luis de Guindos told Bloomberg TV that this type of "overshooting" of the euro should be avoided. Although the euro exchanging hands at roughly $1.18 may be acceptable, it would be "complicated" for policymakers to wave off levels above $1.20, de Guindos warned.

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ECB’s Kazaks expects more rate cuts if current economic trajectory holds, Bloomberg News reports Updated 03/27/2025, 03:05 AM 0 © Reuters. (Reuters) - The European Central Bank could lower borrowing costs further if the current economic trajectory is maintained, Governing Council member Martins Kazaks told Bloomberg News in an interview on Thursday. Kazaks, who is also the Latvian central bank governor, told Bloomberg News tariffs are another source of uncertainty. Which stock should you buy in your very next trade? AI computing powers are changing the stock market. Investing.com's ProPicks AI includes 6 winning stock portfolios chosen by our advanced AI. In 2024 alone, ProPicks AI identified 2 stocks that surged over 150%, 4 additional stocks that leaped over 30%, and 3 more that climbed over 25%. Which stock will be the next to soar? Unlock ProPicks AI 0 Latest comments 1D 1W 1M 6M 1Y 5Y Max US 30 42,489.90 +35.1 +0.08% US 500 5,711.10 -1.1 -0.02% Dow Jones 42,454.79 -132.71 -0.31% S&P 500 5,712.20 -64.45 -1.12% Nasdaq 17,899.02 -372.84 -2.04% S&P 500 VIX 18.49 +0.16 +0.87% Dollar Index 104.125 -0.082 -0.08% Most Popular Articles News Analysis Bitcoin price today: muted at $87.3k as Trump’s auto tariffs weigh By Investing.co... Mar 27, 2025 Asia stocks hit by Trump auto tariffs, AI data center doubts; China steady By Investing.co... Mar 26, 2025 Elon Musk says Trump auto tariffs to have “significant” impact on Tesla By Investing.co... Mar 27, 2025 Trump announces 25% tariffs on foreign-made vehicles By Investing.co... Mar 26, 2025 Trump willing to reduce China tariffs for TikTok deal By Investing.co... Mar 26, 2025 More News Market Movers Name Last Chg. % Vol. NVDA 113.76 -5.74% 296.43M TSLA 272.06 -5.58% 156.25M PLTR 92.28 -4.37% 82.14M AAPL 221.53 -0.99% 34.53M AMZN 201.13 -2.23% 32.99M MSFT 389.97 -1.31% 16.13M META 610.98 -2.45% 12.66M Trending Stocks Name Last Chg. % Vol. TSLA 272.06 -5.58% 156.25M NVDA 113.76 -5.74% 296.43M GME 28.36 +11.65% 53.31M SMCI 37.04 -8.86% 59.73M PLTR 92.28 -4.37% 82.14M Show more Install Our AppScan QR code to install app Google Play App Store Blog Mobile Portfolio Widgets About Us Advertise Help & Support Authors Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks. Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed. Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website. It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website. Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

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