Euro Area inflation continued to slow down in February. Economists at Nordea continue to expect the first rate cut in June
Euro area inflation falls
Eurozone headline inflation eased to 2.6% in February (compared to 2.8% in January), while core inflation dropped to 3.1% (from 3.3%). Considering these updated inflation figures and our perspective on a gradually moderating labor market, our anticipation remains for the ECB to initiate rate cuts come June. The likelihood of an earlier rate cut appears slim following today’s inflation data. However, it’s essential for the ECB to adopt a somewhat hawkish stance in order to overlook the diminishing inflationary trends and the fragile macroeconomic landscape, potentially leading to a further delay in implementing rate cuts.
