Breaking News: European Central Bank Expected to Ease Monetary Policy Again, Goldman Sachs Predicts
In the latest update from Goldman Sachs, analysts anticipate that the European Central Bank will continue its rate-cutting cycle during its upcoming meeting. The central bank has been gradually lowering policy rates since June, with expectations for further easing in the near future.
Recent data has supported the case for additional rate cuts, as policymakers believe that continued disinflation and downside risks to economic growth warrant further monetary stimulus. The recent cooling in wage growth has been viewed positively, reinforcing the argument for a more accommodative policy stance.
Goldman Sachs is now forecasting not just one, but two additional rate cuts this year, indicating a shift in the central bank's signaling. Forward-looking indicators suggest a slight downgrade to near-term growth projections, with adjustments to core inflation rates expected in the coming years.
Despite potential headwinds from lower oil prices and a stronger euro, Goldman Sachs remains bullish on the ECB's decision to implement a second 25bp cut on September 12. The Governing Council is likely to maintain a data-dependent approach without providing explicit guidance on future policy paths.
Looking ahead, Goldman Sachs projects quarterly rate cuts leading to a terminal rate of 2.25%, with potential for a more aggressive pace in the first half of 2025. This strategic approach aims to support economic growth and inflation targets in the years to come.
In conclusion, investors should pay close attention to the ECB's upcoming meeting and the subsequent policy decisions. The anticipated rate cuts and accommodative stance could have significant implications for financial markets and individuals' investment portfolios. Stay informed and stay ahead of the curve with insights from top financial analysts like Goldman Sachs.