ECB preview: Cut in June – and a pause in July

The ECB will cut its policy rate by 25bp at its June meeting . More interesting , however, is the question wh ether the ECB will provide any guidance for its policy path after the June meeting . We expect the updated staff projections f or 2025 and 2026 to be broadly unchanged , allowing in principle a steady decline in policy rates. But the hawks in the Governing Council will point to continuing high wage pressure as an upside risk to inflation , demanding caution . In the end, we think, the ECB will signal its general intention for a further easing, while stressing the data dependency of any future decision. Based on the latest data and statements coming out of the Governing Council we now expect the ECB to skip the July meeting and cut rates again only in September. We forecast a total of 100bp of cuts for this year.