Via a note from Morgan Stanley economists last week, in summary:
- expect 3 25 bp rate cuts from the ECB this year
- say that divergence between the Fed and ECB on rate cuts will be small: "While a certain level of decoupling between the Fed and ECB can occur, we think that it will be limited"
MS had been projecting a 50bp rate cut from the ECB in December 2024 but have dialled this back to 25bp.
ECB
