A move at the ECB’s final meeting of 2024 would also help protect the stuttering economy and ensure a soft landing, they said.
An ECB spokesperson declined to comment.
The central bank delivered a third cut of the year in borrowing costs on Thursday, driven by gloomy signals for private-sector growth and a steeper-than-expected slowdown in euro-zone prices. That brings the deposit rate to 3.25% from a peak of 4%.
While inflation has slumped to 1.7%, officials see it quickening again before sustainably meeting the target. A tweak in their policy statement, however, suggested they could achieve that aim sometime in the first half of next year, rather than at the end.
See also: German breweries are forced to adapt as Gen Z goes alkoholfrei
When explaining the ECB’s latest decision, President Christine Lagarde refused to be drawn on when and how quickly rates will be decreased — even as she argued that downside risks to inflation outweigh upside threats.
Markets stepped up wagers on further loosening. Investors are now toying with the idea that quarter-point reductions will persist into April 2025, rather than March as assumed earlier. Some traders are also starting to bet on a 50 basis-point move in December.
A cut of that size wasn’t discussed this week, according to the people.