(Bloomberg) -- The European Central Bank will cut interest rates in April as inflation slows more forcefully than officials currently expect, according to analysts at Goldman Sachs.
“We now see prospects for substantially faster disinflation in the euro area,” economists led by Jari Stehn said Thursday in a report to clients. While a change in March can’t be excluded, “we view April as somewhat more likely given our expectation for firmer growth, the ongoing strength in wage growth and more data to confirm the slowdown in underlying inflation.”
Only last week, the US investment bank said the first cut would probably happen in the second quarter, not in the third as previously thought. Data showing price gains in the euro area are easing more quickly than predicted has also led financial markets to ramp up bets on earlier ECB moves.
Goldman said it expects the Governing Council to lower rates by a quarter-point at every meeting until the deposit rate — currently 4% — reaches 2.25% by early 2025.
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