Economists at ANZ Bank delve into the Federal Reserve (Fed) and European Central Bank (ECB) outlooks as the global economy navigates through a transitional period.
Anticipating ECB Rate Cuts in the European Spring
ANZ Bank’s core perspective suggests that progress toward inflation targets in both the United States and the Euro Area will pave the way for the Fed and ECB to initiate interest rate cuts in the coming year.
The analysis from ANZ Bank indicates that the conditions for ECB rate cuts are expected to materialize during the European spring. While acknowledging recent subdued inflation readings in the United States, ANZ Bank projects that the Federal Open Market Committee (FOMC) will likely wait until the northern hemisphere summer before expressing enough confidence to implement rate cuts.
ANZ Bank’s Projections:
FOMC to cut the target for fed funds by 100 basis points, bringing the fed funds ceiling to 4.50% by the end of the year.ECB to implement key policy rate cuts totaling 150 basis points by the close of the year.
As the global economic landscape undergoes transitions, ANZ Bank economists offer their insights into the expected timelines for these rate adjustments by the central banks. The forecasted rate cuts reflect ANZ Bank’s assessment of the economic conditions and progress toward inflation targets in the respective regions.