ECB to Cut Rates Three Times in 2024, Vanguard Says

I think our view is that we're going to have three rate cuts this year starting tomorrow in a couple of days on Thursday. And I think the reason for that really is, you know thinking about what's happening in Europe, we see growth below trend, although more recently it's been positive in Q1 and we do expect the end of stagnation, right. So that's one of the strap lines. We've had five quarters of wheat growth and now we're moving into a kind of more positive territory with growth. Inflation has been resilient. However, it's the inflation outlook that matters. And while the surprise was on services inflation, which has proved stickier, all other components are actually very much going back to trend. So the focus will be very much on the outlook. And given this picture, we see three rate cuts this year. So you not too concerned then about services sector wages for example, which might be some people's area of focus or or commodities taking another leg higher. These things shouldn't worry the ECB too much. These things we, we have like a base case view, which is the most likely scenario. And under that we expect it to be 3 cuts going back to target by the end of this year on the headline and core, the very start of next year. So a very kind of positive picture, what you mentioned about commodity prices and services and wage growth in the service sector, we very much see those as risk factors. So we don't see them materializing. They're kind of more low probability events. It feels like we've narrowly avoided recession and so much of the Eurozone and, and the fact that recession or at least the word recession isn't even in the market narrative when it comes to to Europe right now. Is that, is that a blind spot? What do you think? No, I think that obviously we had like a near recession at the end of last year. So the narrative we're running is that the worst is behind us in Europe. Rates went up into restrictive territory, the economy weakened, 0% growth rate in Q4. And so the worst is behind us. We didn't really have that recession, but that weakness came. And we will see, you know, that sort of working through other parts of the economy as we go forward.