Deutsche Bank Expects Quicker ECB Rate-Cutting Cycle, Reports Reuters

Deutsche Bank announced on Thursday that it is now expecting a quicker rate-cutting cycle from the European Central Bank (ECB), predicting a series of quarter-point cuts starting in December.

Previously, the bank had anticipated a gradual approach from the ECB, with quarter-point cuts scheduled for each quarter until a terminal rate of 2-2.5% was achieved around the end of 2025.

In a recent note, Deutsche Bank stated, “We are moving to a faster normalization call, with the ECB reaching the same terminal rate of 2.00-2.50% six months earlier, by mid-2025.”

The bank indicated that it expects this accelerated easing cycle to involve consecutive 25 basis point cuts beginning in December, though it does not rule out the possibility of a 50 basis point cut at that time.

Deutsche Bank is among the latest institutions to revise its expectations regarding ECB policy, following indications of a slowing economic outlook.