ECB rate cuts still a long way off, fiscal rules debate

This week’s comments by ECB officials, as well as signs that underlying inflationary pressures in the euro-zone remain strong, support our view that the first ECB rate cut will only come in the second half of 2024. Meanwhile, though EU finance ministers may not reach an agreement on new fiscal rules when they meet next week, it seems clear that fiscal policy in the euro-zone will be tightened only gradually in the coming years.