The poll shows that 64 out of 77 economists (about 85%) expect the ECB to cut rates by 25 basis points at its next meeting and again in December. Another four respondents expect a single 25 basis point rate cut for the rest of the year, while eight expect three rate cuts at each of the remaining meetings.
In the August poll, 66 out of 81 economists (about 81%) expected two more rate cuts this year, so this is not a major change in opinion.
To give some context, the ECB will meet next week, and again on October 17, before the last meeting of the year on December 12.
Looking at market prices, traders have more or less fully priced in a 25bp rate cut for next week (~99%). For the rest of the year, they are currently pricing in rate cuts of around 60bp. Looking ahead to the first half of next year, prices are pricing in rate cuts of around 143bp.
The nearly two-and-a-half-year rate cuts scheduled for the rest of 2024 will be interesting to watch in the coming months. The ECB seems inclined to cut about once every three months, skipping a meeting. So that’s what economists have been reading, I guess. For some context: a growing divide within the ECB over the economic outlook?
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