Further gradual rate cuts will be appropriate if baseline projections hold – ECB accounts

• Members were increasingly confident that inflation would return to target in 1H 2025
• A gradual dialing back of policy restrictiveness would be appropriate if baseline projection for inflation is confirmed over the next few months and quarters
• There are still many upside and downside risks to inflation outlook, so should not let its guard down in the final stretch of the disinflation process
• A cautious approach is still warranted amid prevailing uncertainties and the existence of a number of factors that could hamper progress on inflation developments
• Some members noted a case could be made for a 50 bps rate cut (for December) and would have favoured more consideration on such a possibility
• Full accounts

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