ECB Slashes Rates 6th Time – The Crying for Change?
The European Central Bank has lowered its policy rate once again, this time to 2.50%. The officials claimed that the disinflation wheel is spinning just right and that wage growth is taking the chill pill it was supposed to. The big news is that, after this cut, the ECB says “rates are less restrictive than before.” A sweet note for the markets, but also a sign that the big debate is still alive.
Why this matters for Bunds and the Euro
- Bund yields got a little push, because people started to think the ECB might raise rates again.
- EUR/USD crossed back the 1.08 mark – a sign that 2025 expectations are a bit kinder.
- Still, the directive is “aggressive” in a way, so not everyone thinks the band has fully loosened up.
Can the ECB be “Less Restrictive”? The audit of the debate.
Most of the lions (or officials) are split on whether they should even drop the word “restrictive.” They’re saying the stops are easing but still not walking freely. There’s still a bit of disagreement on how far the policy can glide before reaching the horizon.
When the rate drops, the fight to keep the “hawk attitude” gets louder – that creates the pressing question: does the ECB have a new direction or is it still wandering? For now, 2.50% sits comfortably in the estimated neutral territory. The next step is less automatic and more stuffy for the policy team.
Where do we see Aventidas? Forecasts for the future
The big expectation was that another move would follow in April. The heavy push of spending plans might start to filter out in the next three or so years. However,
- Demand remains weak.
- On the sidelines, U.S. trade policy is still tossing about plenty of headwinds.
In short, the ECB has finally slipped a bit – it’s doing so, but no one knows for sure how far the slide continues.
