According to Jinshi Data, Bank of America said that the European Central Bank continues to be very cautious about its interest rate cut cycle, and it is expected that the rate cuts in 2025-2026 will exceed market expectations.
Bank of America analysts said in a report that deposit rates will fall to 2% (currently 3.75%) by the third quarter of 2025 at the latest and to 1.5% in 2026.
“Inflation is lower than expected, so a rate cut by the ECB to (their) neutral rate forecast in 2025, with further cuts in 2026, remains the base case,” they said.
