How much will ECB rates decrease in 2024?

Anticipation is growing for the ECB meeting in March, with the unknown on the rate cut remaining unresolved.
How much will the cost of money decrease in 2024? Analysts and investors are asking this, with fluctuating forecasts while macro data on the Eurozone fluctuate between falling inflation, but not at the constant rates expected, and less resilient growth, especially due to the German crisis.
The ECB has kept interest rates at a record high since last September and continues to reject any rate cut date, arguing that rising wages are still too fast to give the green light and start easing restrictive policy.
Traders meanwhile cut their estimates of interest rate cuts this year to less than a percentage point, the lowest bet in months.
ECB rates, how many cuts are coming? Forecasts Swap contracts show that fewer than four 25 basis point cuts will be expected by the end of 2024, down from seven at the end of last year.
Money markets have also reduced the chances of a first move in April to just 30%, with the first reduction expected in June.
The revaluation boosted the euro.
The moves came after French services and manufacturing data beat economists' expectations, the latest sign of economic resilience that has forced investors to reconsider how much easing major central banks can offer.
Data for the euro zone hit an eight-month high, with the services index returning to 50, ending six months of contraction.
read also ECB, budget in the red and the rate hike is to blame The market's bets on cuts were probably also influenced by the strength of the American economy, which led operators to reevaluate the extent of the easing that the Federal Reserve can offer this year.
Another round of strong US inflation data could cause the Fed to delay, said Jane Foley, head of FX strategy at Rabobank.
“To avoid a decline in the euro-dollar exchange rate, this also suggests a likely delay in ECB policy changes,” he said.
ECB policy makers in recent days have urged caution to avoid premature policy adjustments, echoing a view seen in the minutes of the Fed's latest meeting.
“We are in the midst of a reassessment of rate cuts for 2024.” , said Evelyne Gomez-Liechti, a strategist at Mizuho International, seeing the ECB's scaling back of rate bets as a "sensible" move.
“Three 25 basis point cuts represent our baseline scenario for the ECB and we believe they will only be tapered gradually as labor markets continue to be resilient,” he added.
While it may be very tempting, it is too early to cut interest rates, Nagel reiterated in a speech on Friday, February 23.
“We will receive a more detailed picture of how domestic price pressures are playing out only in the second quarter.
Then we will be able to contemplate a cut in interest rates,” he added.
read also ECB minutes, rate cut still premature Isabel Schnabel, the other German on the 26-member Governing Council and another influential voice, was also cautious in her assessment on Friday, arguing that the final phase of keeping inflation under control it may be more difficult than some anticipate.