David McNamara: ECB may not cut interest rates by as much as markets anticipate next year
The market is anticipating 125bps of easing from the ECB.
As we head into the last month of the year, from an interest rate perspective, 2024 has been characterised by a pivot in global monetary policy.
The year started with central banks on hold after undertaking an aggressive pace of rate hikes between 2022 and 2023. The expectation at the start of this year was that the coming 12 months would see a significant reduction in interest rates. Investors in early January were pricing in rate cuts in the magnitude of 125-150bps from the ECB, Fed and Band of England amid signs inflation was on a downward trajectory.
