ECB Accounts: Further rate cuts remain on the cards


Policymakers at the European Central Bank (ECB) agreed last month that interest rate cuts should be approached cautiously and gradually, but they also indicated that more policy easing was likely on the horizon, all according to the publication of the bank’s Accounts of the December 11–12 gathering.

Highlights

Regarding the inflation outlook, members were increasingly confident that inflation would return to target in the first half of 2025.

If the baseline projection for inflation was confirmed over the next few months and quarters, a gradual dialling-back of policy restrictiveness was seen as appropriate.

The Governing Council should not let its guard down in the final stretch of disinflation.

There were still many upside and downside risks to the inflation outlook.

More check points had to be passed to ascertain whether disinflation remained on track and kept open the optionality to make adjustments along the way.

This cautious approach was still warranted in view of the prevailing uncertainties and the existence of a number of factors that could hamper a rapid decline in inflation to target.

Some members noted that a case could be made for a 50 basis point rate cut at the current meeting and would have favoured more consideration being given to the possibility of such a larger cut.

Gradual approach was needed to allow an assessment of whether policy rates had reached a broadly neutral level.

It was remarked that a 50 basis point cut could be perceived as the ECB having a more negative view of the state of the economy than was actually the case.

It was advisable to draw on a broad range of approaches to estimate or model the natural rate.

Case for adjusting interest rates by 50 basis points was not the same on the way down as it had been during the rate-hiking cycle.

Geopolitical and economic policy uncertainty had become more pronounced since the last Governing Council meeting.

Risks to inflation were broadly balanced.

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

XM
Account
7.2
Tools
9.2
Service
9.4
Trading
9.0
Trust
7.0
Experience
8.4
Read review
Moneta Markets
Account
7.4
Tools
6.6
Service
8.0
Trading
6.6
Trust
5.2
Experience
9.2
Read review
Trading Pro
Account
7.2
Tools
5.2
Service
6.6
Trading
8.0
Trust
5.0
Experience
7.0
Read review
Pepperstone
Account
8.2
Tools
8.2
Service
7.4
Trading
9.0
Trust
8.8
Experience
9.0
Read review
XM
Read review
Moneta Markets
Read review
Trading Pro
Read review
Pepperstone
Read review
Trading Pro
Read review
Pepperstone
Read review
XM
Read review
Moneta Markets
Read review
Trading Pro
Account
7.2
Tools
5.2
Service
6.6
Trading
8.0
Trust
5.0
Experience
7.0
Read review
Pepperstone
Account
8.2
Tools
8.2
Service
7.4
Trading
9.0
Trust
8.8
Experience
9.0
Read review
XM
Account
7.2
Tools
9.2
Service
9.4
Trading
9.0
Trust
7.0
Experience
8.4
Read review
Moneta Markets
Account
7.4
Tools
6.6
Service
8.0
Trading
6.6
Trust
5.2
Experience
9.2
Read review

Recommended content


Recommended content

Editors’ Picks

AUD/USD tumbles to a five-year low below 0.6000 amid US-China tariffs war

AUD/USD tumbles to a five-year low below 0.6000 amid US-China tariffs war

The AUD/USD pair tumbles to near 0.5985 for the first time since the COVID-19 pandemic during the early Asian session on Monday. The Australian Dollar weakens as China slapped a 34% tax on all US imports in retaliation for US President Donald Trump’s tariffs, raising fear of a trade war between the United States and China. 

AUD/USD News
USD/JPY hangs near a multi-month low; holds above 145.00 amid mixed cues

USD/JPY hangs near a multi-month low; holds above 145.00 amid mixed cues

USD/JPY kicks off the new week on a weaker note, though it manages to hold above the 145.00 mark. The global carnage, amid the mounting risk of a recession led by Trump's sweeping tariffs, underpins the safe-haven JPY and weighs on the currency pair amid a bearish USD.

USD/JPY News
Gold correction deepens after new record-high is set on Trump’s tariff announcement

Gold correction deepens after new record-high is set on Trump’s tariff announcement

Gold pushed higher with the initial reaction to tariff announcements from the United States on Wednesday and touched a record peak of $3,167 before staging a deep correction heading into the weekend. Investors will stay focused on tariff-related headlines and pay close attention to inflation data from the US. 

Gold News
Week ahead: US CPI and RBNZ decision on tap amidst tariff mayhem

Week ahead: US CPI and RBNZ decision on tap amidst tariff mayhem

US Dollar traders await US CPI data amid global trade turbulence. RBNZ to cut by 25bps, could maintain dovish stance. China’s CPI and PPI to reveal tariff impact on inflation. Strong UK GDP data could help the pound climb higher.

Read more
Strategic implications of “Liberation Day”

Strategic implications of “Liberation Day”

Liberation Day in the United States came with extremely protectionist and inward-looking tariff policy aimed at just about all U.S. trading partners. In this report, we outline some of the more strategic implications of Liberation Day and developments we will be paying close attention to going forward.

Read more
The Best brokers to trade EUR/USD

The Best brokers to trade EUR/USD

SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.

Read More

Forex MAJORS

Cryptocurrencies

Signatures

Best Brokers of 2025