The ECB is expected to stick to gradual rate cuts, and the situation in the Middle East may bring variables.
Mojmir Mrak, a professor at the Faculty of Economics and Business at the University of Ljubljana, said that considering geopolitical risks, the ECB will stick to gradual rate cuts in the first half of next year. Mrak said that compared with the situation after the last meeting and today, the market expects (interest rates) to fall more slowly. My view is that we are now on the path of a downward interest rate. Given that we live in an extremely unstable world, the ECB is expected to take gradual action. If there is greater volatility in oil prices in the Middle East, the situation will change immediately. Mrak pointed out that if a gradual approach is taken, the ECB may still cut interest rates by 25 basis points at its October and December meetings, and further small cuts in the first half of next year.
