ECB’s Šimkus backs another 25 bps rate cut in March

• Sees a couple more rate cuts after March as well
• We can allow for looser monetary policy
• We still have space left before reaching neutral rate
• Trump tariffs increase uncertainty

This fits with what his colleague Kažimír is saying here as well as the current market pricing. For what’s left of the year now, traders are seeing ~85 bps of rate cuts in total. That’s a bit of a step up after Trump’s tariffs escalation over the weekend.

This article was written by Justin Low at www.forexlive.com.