Week in Focus

6 September 2024: ECB – the double rate cut

The ECB is likely to cut the deposit rate by 25 basis points in the coming week. It is even likely to cut the main refinancing rate by 60 basis points in order to reduce the spread between the two rates and thus keep volatility on the money markets low. Communication is likely to be a balancing act, as some doves in the Council would probably like to see a back-to-back rate cut in October in view of the economic risks, while other Council members would prefer to proceed with caution. We expect three further rate cuts in December, March and June and are therefore more conservative than the market.

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