Summary
Highlights
The Committee was relatively unanimous in its decision, with only governor Miran preferring a 50bp cut.
Chair Powell suggested that the latest cut was driven by risks on employment and that it was a “risk-management cut”.
Leading indicators of wage growth and employment point to potential further softening ahead for private consumption.
In this edition
The ECB kept policy rates unchanged at its September meeting, emphasising a data-dependent approach before deciding on further rate cuts.
The central bank raised its forecast for economic growth this year and noted that growth has been resilient so far due to domestic demand and labour markets. Secondly, the bank expects that consumer spending and investments could get a boost from rate cuts already implemented. Importantly, the ECB slightly downgraded its expectations for growth in 2026, hinting some growth concerns beyond this year.
We would like to emphasise that, while the US-EU agreement has reduced some uncertainty on trade, tariffs on EU exports remain higher than they were previously. As a result, these could affect the region’s growth, underlining the need for further monetary easing.
Key dates
23 Sep Australia, Eurozone, India, UK, and US flash PMIs |
25 Sep US durable goods orders and existing home sales | 26 Sep US personal income and spending and core PCE deflator |
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