ECB In Little Rush To Cut Rates

Summary

• The European Central Bank left interest rates unchanged, without conveying any urgency to start cutting rates in the next few months.
• It seems most likely that June or July would be the preferred time to start cutting rates.
• Markets in Europe have priced in 125 to 150 basis points (bps) of rate cuts this year, but I think that’s overzealous.

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By David Zahn, CFA, FRM, Head of European Fixed Income, Franklin Templeton Fixed Income

The European Central Bank left interest rates unchanged, without conveying any urgency to start cutting rates in the next few months. David Zahn, Franklin Templeton Fixed Income’s