Posted 3/7/2024, 5:25:00 AM
ECB Seen Resisting Calls for Rate Cut Despite Slowing Growth
- Europe's energy crisis has eased recently, with lower inflation and natural gas/oil prices
- However, inflation remains sticky around 2-3% and has spread to services
- This means an ECB interest rate cut is unlikely at this week's meeting, despite stalled economic growth
- Markets expect a small rate cut in June, but ECB wants more evidence of declining inflation first
- Lagarde will likely affirm a June cut but resist pressure for earlier action given still-tight labor market