According to Jinshi, Berenberg chief economist Felix Schmidt said that ECB President Lagarde will not promise to cut interest rates after the summer vacation at the meeting on Thursday, but is unlikely to flatly refuse to cut interest rates. The ECB hopes to collect more data and keep all options open.
Berenberg expects the ECB to cut rates by 25 basis points in September and then pause rate cuts until the first quarter of 2025 as base effects could temporarily push up inflation by the end of 2024.
Over the next year, Berenberg expects two more rate cuts of 25 basis points each, bringing the deposit rate to 3% by mid-2025.
