Published: 2024-05-27T09:05:02.000Z
EUR flows: ECB Lane Confirms June 6 Cut and More in 2024
Director of Research , Macroeconomics and Strategy
1
No FX reaction to a key FT interview with ECB Lane, though bond yields edged lower.
ECB Lane guidance that the 1 rate cut is pretty certain and will be followed by gradual moves to reduce policy restriction is of interest. Though the market expects the ECB to cut key rates by 25bps on June 6, debate exists over whether 2024 will see 2 or 3 cuts in total. Lane comments are more leaning towards 3, as he points to more controlled wage tracker data. He also noted that the neutral rate was 2.0% or just above, which suggests that 3 rate cuts would still leave policy restrictive this year.