ECB’s “Most Boring” Decision: They Calmly Hit Pause
Just when everyone was bracing for the usual rate scare, the ECB decided to keep the deposit rate at a firm 3.75% and hit the pause button. It’s the first cut of the current cycle and the first tweak since 2019, handed out back in June.
What Happened in Forward Guidance?
“Just a copy‑and‑paste of what we already told,” the Governing Council put it—less fireworks, more “data‑dependent” and “meeting‑by‑meeting” sentences.
Key Takeaways & Numbers to Keep an Eye On
- Upcoming Cuts: 25 basis points set for September and December—our baseline for the next two moves.
- Decision Drivers: Inflation outlook, underlying inflation dynamics, and how the policy trickles down to markets.
- No Boat‑Roaring Yet: ECB prefers to stay calm before the summer break, but it’s ready to hit the next cut in roughly eight weeks.
Bottom Line
With the deposit rate stuck at 3.75%, the ECB keeps its silence until fresh data arrives. No dramatic boat‑shaking yet, but the big rate cuts are on the way—just a couple of months away.
