Deutsche Bank Adjusts ECB Rate-Cutting Forecast

LONDON (Reuters) – Deutsche Bank announced on Thursday that it now anticipates a quicker European Central Bank (ECB) rate-cutting cycle, expecting back-to-back quarter-point cuts starting in December.

Previously, the bank had projected a gradual easing with quarter-point cuts each quarter until reaching a terminal rate of 2-2.5% around the end of 2025.

“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 noted.

They expect the more rapid easing to be implemented through consecutive 25 basis point cuts from December but do not rule out the possibility of a 50 basis point cut in that month.

Deutsche Bank is the latest financial institution to adjust its ECB policy outlook this week, responding to further indications of a weakening economic environment.