Citigroup expects the ECB to cut interest rates by 25 basis points during its October 17 meeting, with further cuts planned until 2025 to reach a deposit interest rate of 1.5%. Citi has joined a growing number of banks in predicting that the European Central Bank will cut interest rates by 25 basis points next October. The group's shift came especially after ECB President Christine Lagarde said at a hearing in the European Parliament that the board's confidence in the timely return of inflation to the target has increased, and that the board will take this into account at its next meeting this month. We expect the ECB to cut interest rates in October and December and until the beginning of 2025, until reaching an interest rate level at 1.5% levels by September 2025. A cut of 25 basis points this month seems almost certain, and it can be argued that there is a chance of a cut of 50 basis points greater than stabilization, although 50 basis points is unlikely.
