Golden Finance reported that jpmorgan Chase updated its interest rate forecast for the European Central Bank, expecting the ECB to cut interest rates next in September, while the bank previously expected the rate cut to take place in July.
The recent monetary policy direction of the European Central Bank has been closely watched by the global financial market. On the evening of June 5th, the European Central Bank announced its interest rate decision, cutting the three key interest rates by 25 basis points. Since the first interest rate cut began in June 2024, the European Central Bank has reduced the deposit facility rate from 4% to 2.25%. At present, the inflation rate in the eurozone has dropped below the 2% target and the economic recovery is sluggish. Against this backdrop, the market is constantly speculating about the subsequent interest rate cut pace of the European Central Bank.
Jpmorgan Chase’s adjustment of its forecast this time might be the result of a comprehensive consideration of multiple factors such as the economic data of the eurozone, inflation trends, and geopolitical factors. From the perspective of economic data, although the market had previously held high expectations for the European Central Bank to cut interest rates in July, some recently released economic indicators show that although the eurozone economy is under pressure, it has not yet reached the level where an urgent interest rate cut is needed in July for stimulus. For instance, the labor market data has shown resilience to a certain extent, and the employment situation in some industries is better than expected. This might lead jpmorgan Chase to believe that the European Central Bank has room to postpone the interest rate cut until September.
In terms of inflation, although the overall inflation rate has declined, the trend of core inflation remains uncertain. The inhibitory effect of some temporary factors on inflation has gradually dissipated. Meanwhile, events such as the disruption of Red Sea shipping may push up prices to a certain extent, making the inflation outlook more complicated. Analysts at jpmorgan Chase pointed out that the recent slowdown in core inflation might be the result of the fading of temporary factors, which makes it difficult to clearly judge the inflation trend. Therefore, the European Central Bank will be more cautious when formulating monetary policy.
Compared with the predictions of other institutions, Goldman Sachs previously expected the European Central Bank to cut interest rates by another 25 basis points in September, bringing the final interest rate to 1.5% in 2025. Antonio Villarroya of Santander Bank also believes that the European Central Bank may cut interest rates by another 25 basis points in September, and if the United States initiates the imposition of additional tariffs after the moratorium period of “equivalent tariffs” ends, the European Central Bank may increase the easing intensity. Institutions such as the International Monetary Fund predict that the economic growth rate of the Eurozone will not exceed 1% in 2025, which is widely believed by the market to prompt the European Central Bank to continuously cut interest rates. It can be seen that although different institutions have a certain consensus on the subsequent interest rate cut pace of the European Central Bank in September, there are still differences in the specific extent of the rate cut and the subsequent policy path.
On July 24th, the European Central Bank will hold its next policy meeting. At that time, whether it will follow the latest forecast of jpmorgan Chase or have other considerations, global financial markets are closely watching. With the increasing uncertainty of the global economic environment and the potential impact of geopolitical factors, the monetary policy decisions of the European Central Bank will face more challenges.
Related Topics:
- Ukrainian police have arrested a man suspected of hacking into the servers of an international company for cryptocurrency mining
- In the past half year, over 60% of frequent traders on pump.fun have suffered losses, while 311 addresses have made more than one million US dollars
- Us Senator Mike Lee: An amendment is being drafted, resulting in the disqualification of members of Congress whose deficits exceed 3% of GDP for re-election
