ECB March meeting: opening the door for a rate cut

The ECB’s March meeting will mark the start of the “official” discussion about the timing of the first rate cut. Unlike in previous meetings, the question of the timing of a rate cut will be now on the agenda. The updated staff projections are likely to show a downward revision of inflation for this year, reenforc ing the signal that the ECB is moving closer to a rate cut. No immediate actions, however, will follow from this discussion at this point and t he ECB will stress again the data dependenc y of any future decision. The importance of wage growth in determining the inflation outlook will also be highlighted again . L atest data remain inconclusive to whether wage dynamics are starting to ease or not. Overall, the main insight we hope to gain from the March meeting is how far advanced the discussion in the Govern i ng Council is regarding starting the cutting cycle. We continue to expect the first cut to take place in June.