Former head of ECB Trichet: Expects a 25 basis point cut from the ECB

Jean Claude Trichet former head of the ECB, is on CNBC saying that he does expect a 25 basis point cut from the ECB when they meet on Thursday.

• Expects ECB to be very cautious and prudent
• I think it’s a reasonable to think of one additional rate cut between now and the end of year.
• That projection could change given the level inflation going forward
• The ECB should be data dependent
• I do not expect the Fed and the ECB to not be influenced by each other.
• In the US, there has been a lot of budget expansion
• Expect inflation to be around 2% in 2025
• Not surprised to see the services be responsible for better growth and inflation

The decline in rate would be the first cut since April 2016. The ECB started to raise rates in July 2022. They have kept the main financing rates the same (at 4.5%) since September 2023.

This article was written by Greg Michalowski at www.forexlive.com.