Going faster

Christine Lagarde hinted at the last ECB meeting that the market didn't need to expect another interest rate cut in October after the rate cut in September. Because she wanted to have more information about the state of the European economy...

Now, the latest numbers have shown that the European economy is in worse shape than expected (no kidding!). The European economy is even shrinking in the month of September, for the first time in seven months. And the German entrepreneurs have a very dark outlook on the economy, says the IFO indicator. This all combined fuels the markets' belief that we can expect another rate cut in October, which would mean a third rate cut already this year.

Chances from 20 to 55 %

In the beginning of September the chances for another rate cut in October were slim, a measly 20 %. Today the odds have turned to a much higher 55 % chance for a rate cut. And when you hear Goldman Sachs economist Sven Jari Stehn talk, you can hear that for them the rate cut is almost a certainty.

It can also be wishful thinking, but in my opinion the ECB has no other option than to cut the rates. For the economy, but also for the housing market. Everything is slowing down, houses stay on the market because of the combination of high prices and high interest rates.

Let's hope Mrs Lagarde has some common sense!

Sincerely,

Pele23

Posted Using InLeo Alpha