ECB to cut by 25bp this week – focus is on signalling what’s to come

Deutsche Bank forecasts that the European Central Bank (ECB) will lower its policy rate by 25 basis points to 2.50% on March 6, bringing the total cuts so far to 150 basis points.

The move is expected as the ECB continues to adjust monetary policy amid evolving economic conditions, including trade tensions and increased defence spending. Investors will be closely watching the updated staff macroeconomic projections to assess how these factors are influencing the ECB’s outlook.

Markets will also look for signals from the Governing Council on whether monetary policy remains “restrictive” or if there is room for further easing. Additionally, there will be speculation about a possible pause in rate cuts in April, with officials potentially hinting at a temporary “skip” before resuming adjustments later in the year. The decision and accompanying commentary will be key in shaping expectations for the ECB’s policy trajectory in the months ahead.

European Central Bank President Lagarde

This article was written by Eamonn Sheridan at www.forexlive.com.