Analysts: ECB will continue to reduce interest because of the tariffs

The European Central Bank will reduce interest rates on its next four sessions, as the economic costs of the US tariffs increase, according to the analysts of JPMorgan Chase.

In the near future, growth in the euro zone will go back more than expected, which will lead to a « very weak » expansion in the next three quarters, according to Greg Fuzesi, Raphael Brun-Aguerre and Mariana Monteiro in a Research Note on Tuesday. « The global environment will be very difficult in the coming months. »

The ECB has reduced the interest six times since June. In the case of four further reductions, the deposit rate would drop to 1.5 percent. In a Bloomberg survey from last month, the economists predicted that the loan costs would only fall to two percent.

In view of the great uncertainty, most political decision -makers have not commented on where the interest rates could level off. After the announcement of tariffs by US President Donald Trump, expectations for further lowering have increased. Anatoli Annenkov, economic expert at Societe Generale, said on Tuesday that an excessive increase by half a point cannot be ruled out next week.