Citigroup expects ECB to cut policy rates by 25 bps in October meeting

(Reuters) – Citigroup said that it now expects the European Central Bank (ECB) to cut interest rates by 25 basis points in its Oct. 17 meeting, according to a note on Tuesday.

The brokerage said this revision comes after ECB President Christine Lagarde in her hearing at the European Parliament said that the Council’s confidence in a timely return of inflation to target had increased, and that the Council will take that into account in its next policy meeting this month.

The brokerage further expects subsequent cuts in December and through the start of 2025 to take the policy rate to 1.5% by September 2025.