After the ECB announced a third rate cut, Abrdn economist Felix Feather said that the inflationary shock caused by the Middle East-related tension may prompt the ECB to take more cautious action because of the increased risk of rising oil prices and inflation. On the other hand, if the Eurozone falls into recession, the ECB may cut interest rates more drastically. Although it declined to promise further interest rate cuts in advance, we believe that the ECB's decision framework strengthened our expectations of cutting interest rates three more times by March 2025.

After the ECB announced a third rate cut, Abrdn economist Felix Feather said that the inflationary shock caused by the Middle East-related tension may prompt the ECB to take more cautious action because of the increased risk of rising oil prices and inflation. On the other hand, if the Eurozone falls into recession, the ECB may cut interest rates more drastically. Although it declined to promise further interest rate cuts in advance, we believe that the ECB's decision framework strengthened our expectations of cutting interest rates three more times by March 2025.