Wednesday, 25 September, 2024

The European Central Bank should cut interest rates at its October

The European Central Bank should cut interest rates at its October meeting as the economic outlook has weakened, according to Johanna Kyrklund, the chief investment officer at Schroders.
  • The ECB “should be cutting rates. They may have a different mandate to the Fed, less of a dual mandate, more focus on price stability, but I think there is room for maneuver here to cut rates in Europe. That would be our expectation,” Kyrklund told Bloomberg TV
  • “It is still quite a challenging environment for Europe. Germany is being caught in the wrong end of a number of trends. It used to rely on cheap Russian energy. It exported to China. That combination is pretty difficult,” she said
  • Kyrklund said she is favoring other markets than Europe at the moment because of economic headwinds, especially in Germany
  • While the big stimulus in China is expected to good news for Europe, it might not be sufficient unless the Chinese government adds fiscal stimulus to the package, she said