Approaching neutral

In Short

ECB cut by 25 bps today: At today’s meeting the GC again decided to cut the deposit rate, to 2.50%. It continues with fully nonreinvestments of its APP and PEPP purchases. Growth outlook does not include German fiscal boost yet: The updated staff projections show the widely expected downward revisions of annual growth which is now set to be at 0.9% (from 1.1%) in 2025, 1.2% (from 1.4%) in 2026 and 1.3% (unchanged) in 2027. A key rationale for the downward revisions in 2025/26 is lower exports and ongoing weakness in investment, in part originating from high trade and broader policy uncertainty.
Approaching neutral
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