ECB Governing Council member bets on two more rate cuts for this year

Investors reckon there are still 45 basis points of rate cuts to come in 2024 — equating to a second quarter-point move and about a 75% chance of another. The next may arrive as soon as September, and is fully priced by October.

Unlike some of his colleagues who’d prefer to take decisions on rates at the quarterly meetings that are accompanied by fresh economic projections, Mr Rehn (pictured) sees each policy gathering as an option for further moves since officials have new economic reports to digest for each. File picture: Billy Higgins

Investor expectations for the European Central Bank (ECB) to loosen monetary policy twice more this year — and bring borrowing costs to as low as 2.25% in 2025 — are fair, according to Governing Council member Olli Rehn.

In some of the most explicit remarks from an ECB policymaker on the path for interest rates, the Finnish central bank chief also said that while officials must ensure inflation returns to 2%, they shouldn’t overly dampen economic activity.