Mohamed El-Erian, dean of Queen's College at Cambridge University, believes that investors mistakenly estimated that the ECB would cut interest rates by the same margin as the Federal Reserve. Although the Eurozone economy is much weaker, interest rate swaps indicate traders are betting that the ECB will cut the benchmark interest rate by about 140 basis points by September 2025, which is almost the same as expected of the Federal Reserve's decline. This is in contrast to the very different economic conditions in the two regions. The US economy grew 3% last quarter, while the Eurozone grew 0.2%. “The market expects the ECB and the Federal Reserve to cut interest rates by the same margin,” El-Erian, former CEO of Pacific Investment Management, said in an interview with Bloomberg TV. “I don't think this will happen. I think the ECB will cut interest rates more than the Federal Reserve.”

Mohamed El-Erian, dean of Queen's College at Cambridge University, believes that investors mistakenly estimated that the ECB would cut interest rates by the same margin as the Federal Reserve. Although the Eurozone economy is much weaker, interest rate swaps indicate traders are betting that the ECB will cut the benchmark interest rate by about 140 basis points by September 2025, which is almost the same as expected of the Federal Reserve's decline. This is in contrast to the very different economic conditions in the two regions. The US economy grew 3% last quarter, while the Eurozone grew 0.2%. “The market expects the ECB and the Federal Reserve to cut interest rates by the same margin,” El-Erian, former CEO of Pacific Investment Management, said in an interview with Bloomberg TV. “I don't think this will happen. I think the ECB will cut interest rates more than the Federal Reserve.”