ECB Considers Interest Rate Cut Ahead of Meeting

European Central Bank member Robert Holzmann suggested that a rate cut of 25 basis points is possible at the upcoming meeting, though he emphasized that it would not exceed this amount and will depend on final data. Investors anticipate further cuts at subsequent meetings, with projections for the deposit rate to drop to 1.75% by the end of 2025, which could stimulate economic growth. Holzmann highlighted concerns regarding inflation, particularly in light of potential import tariffs under U.S. President-elect Donald Trump, which may raise inflation expectations in Europe. He noted that tariffs could increase the costs of imported goods and lead to government spending to alleviate economic pressure, further influencing inflation rates. Meanwhile, the Czech central bank is expected to pause its monetary easing to maintain price stability, as inflation has recently begun to rise again. Overall, both central banks are navigating a complex economic landscape influenced by geopolitical developments and domestic inflation trends.