Nomura: By 2025, the deposit interest rate of the Central Bank in Europe may fall to 1.75% or below

GoldenOctober2024

2024-12-20 14:55:24

On December 20th, Nomura economists George Buckley and Andrzej Szczepaniak said in a report that the divergence among members of the European Central Bank’s committee may significantly increase in the second quarter of 2025. The members will have differences on what the neutral Intrerest Rate is and whether the Intrerest Rate should be below this level. It is expected that the European Central Bank will have to drop the Intrerest Rate below the neutral level to support the economy. The euro area is experiencing a weak rise, and the harmonized inflation rate is expected to be below 2% on average in 2025 and 2026. By September 2025, the European Central Bank’s deposit Intrerest Rate is expected to drop from the current 3.00% to 1.75%, and may even drop further.

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