J.P. Morgan and its European interest rate expectations amid concerns about a return of inflation: In a memo outlining the predictions of the American investment bank
J.P. Morgan regarding the possible timing and extent of European interest rate cuts,
the European Central Bank is expected to take a tightening path to combat high inflation.
J.P. Morgan experts anticipate that policymakers at the European Central Bank will begin
the path of interest rate cuts early in the current year of 2024, surpassing previous expectations.

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Conclusion

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J.P. Morgan experts expect monetary policymakers to start reducing interest rates starting from June of the upcoming year, contrary to earlier expectations pointing to September.
Economists at J.P. Morgan suggest that the magnitude that monetary policymakers at the European Central Bank may adopt will be 100 basis points, contrary to previous expectations of only a 75 basis points reduction.
It is possible that the reduction in European interest rates will begin in July, September, October, and December of the current year.
Economists at J.P. Morgan are concerned about the slowdown in the decline of European inflation, which may leave us uncertain about the current inflation trajectory.
The bank’s experts believe that the recent increase in wages may add to inflationary pressures, reinforcing concerns about the inflation trajectory and potentially redirecting it upward.
A warning from J.P. Morgan economists suggests that geopolitical tensions in the Red Sea, coupled with increasing pressures on shipping companies, may push inflation in a positive direction.

It is worth mentioning that the current situation of the Euro is good and has witnessed positive movements in the previous period of the ended year.

Conclusion

Taking into consideration the European Central Bank’s early interest rate cuts during the current year,
with expectations of an increased reduction, may contribute to a renewed downward trend for the Euro,
potentially increasing negativity. Conversely,
a longer duration of interest rate retention and a decrease in the magnitude
of the reduction may contribute to the continued positivity of the Euro.

J.P. Morgan and its European interest rate expectations

J.P. Morgan and its European interest rate expectations amid concerns about a return of inflation

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