The European Central Bank, in its latest meeting on March 6th, lowered official interest rates by another ¼ point. This marks the sixth consecutive 25 bps cut since June 2024, when the ECB began its rate-cutting cycle in response to moderating inflation and economic slowdown. Following this reduction, the deposit facility rate now stands at 2.50%, while the main refinancing and marginal lending rates maintain their respective spreads.
Two additional 25 bps cuts are expected before the end of the year, which would bring rates to a range of 2.0%–2.25% by summer. However, sovereign bond yields at +1 year in eurozone countries continue to rise due to concerns over a potential trade war (tariffs) under Trump's policies.
Source: ECB | Institute of Analysts | Own Analysis | Reuters
