Market Analysis

Deutsche Bank announced on Thursday that it now expects a faster pace of rate cuts by the European Central Bank (ECB), predicting consecutive 25 basis point cuts starting in December.

Previously, the bank had forecast a more gradual approach, with quarter-point reductions each quarter, anticipating the terminal rate to settle between 2-2.5% by the end of 2025.

However, Deutsche Bank has revised its outlook, suggesting a quicker path to normalization, with the ECB expected to reach the same terminal rate of 2.00-2.50% by mid-2025, six months earlier than initially forecast.

The bank added that while it expects 25 basis point cuts in succession from December, the possibility of a 50 basis point cut in December cannot be ruled out.

This adjustment follows further indications of a weakening economic outlook, making Deutsche Bank the latest to revise its ECB policy expectations this week.

Paraphrasing text from "Reuters" all rights reserved by the original author.