What did Vujcic say about market expectations for ECB rate cuts?

Vujcic stated that the market expectations for up to four ECB rate cuts this year are reasonable and that the risks around the inflation outlook are broadly balanced.

How many rate cuts are investors currently expecting from the ECB?

Investors have recently adjusted their expectations, now anticipating three to four rate cuts from the ECB this year.

What is the current inflation rate mentioned in the article?

The article mentions that inflation was at 2.4% in December and is expected to ease back.

What economic factors are affecting the ECB's decision-making?

The industry is in recession, government investment is weak, and private consumption is low as households are increasing their savings.

What is the expected benchmark rate by the end of the year?

Investors expect the benchmark rate to drop to 2% by the end of the year, following a cut in the current 3% deposit rate.

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Finance

Market Pricing of up to Four ECB Rate Cuts This Year Is Reasonable, Vujcic Says

Published by Global Banking & Finance Review®

Posted on January 20, 2025

3 min read

Last updated: January 27, 2026

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Market expectations for ECB rate cuts discussed by Boris Vujcic - Global Banking & Finance Review — An image illustrating the recent statements by Croatian central bank chief Boris Vujcic on ECB rate cuts, highlighting market expectations and inflation outlook. Relevant to finance news and economic predictions.

ECB Rate Cut Expectations: Vujcic Calls Market Predictions Reasonable

FRANKFURT (Reuters) - Market expectations for European Central Bank interest rate cuts are reasonable and risks around the inflation outlook are broadly balanced, Croatian central bank chief Boris Vujcic said on Monday.

Investors expected as many as five rate cuts from the ECB-POLICY-RATES-82f6314e-6203-420b-bc8b-70a978546822>ECB-POLICY-CENTENO-a52f21b9-8975-4dc5-9a21-8c5e8267aa43>ECB-POLICY-RATES-82f6314e-6203-420b-bc8b-70a978546822>ECB-POLICY-KAZIMIR-00b06d9b-4b99-46ce-a2aa-458d8eb2d993>ECB-POLICY-RATES-82f6314e-6203-420b-bc8b-70a978546822>ECB-POLICY-CENTENO-a52f21b9-8975-4dc5-9a21-8c5e8267aa43>ECB-POLICY-RATES-82f6314e-6203-420b-bc8b-70a978546822>ECB this year but dialled back those bets since the turn of the year, primarily because they are also seeing fewer cuts from the U.S. Federal Reserve.

"There has been a repricing recently from four to five (rate cuts this year) to three to four cuts and I think it's reasonable," Vujcic told a webinar with LC Macro Advisors. "I don't feel uncomfortable with the current market pricing."

"Markets have to make these predictions, we don't. We can always wait for the data and then decide," Vujcic, a member of the ECB-POLICY-RATES-82f6314e-6203-420b-bc8b-70a978546822>ECB-POLICY-CENTENO-a52f21b9-8975-4dc5-9a21-8c5e8267aa43>ECB-POLICY-RATES-82f6314e-6203-420b-bc8b-70a978546822>ECB-POLICY-KAZIMIR-00b06d9b-4b99-46ce-a2aa-458d8eb2d993>ECB-POLICY-RATES-82f6314e-6203-420b-bc8b-70a978546822>ECB-POLICY-CENTENO-a52f21b9-8975-4dc5-9a21-8c5e8267aa43>ECB-POLICY-RATES-82f6314e-6203-420b-bc8b-70a978546822>ECB's Governing Council, said.

Investors have fully priced a cut in the 3% deposit rate on Jan. 30 and see the benchmark down at 2% by the end of the year.

Economic data since the ECB-POLICY-RATES-82f6314e-6203-420b-bc8b-70a978546822>ECB-POLICY-CENTENO-a52f21b9-8975-4dc5-9a21-8c5e8267aa43>ECB-POLICY-RATES-82f6314e-6203-420b-bc8b-70a978546822>ECB-POLICY-KAZIMIR-00b06d9b-4b99-46ce-a2aa-458d8eb2d993>ECB-POLICY-RATES-82f6314e-6203-420b-bc8b-70a978546822>ECB-POLICY-CENTENO-a52f21b9-8975-4dc5-9a21-8c5e8267aa43>ECB-POLICY-RATES-82f6314e-6203-420b-bc8b-70a978546822>ECB's last policy meeting in mid-December have been broadly in line with expectations, bolstering the credibility of projections and indicating that the current policy stance remains appropriate, Vujcic added.

Inflation, at 2.4% in December, is expected to ease back to the ECB-POLICY-RATES-82f6314e-6203-420b-bc8b-70a978546822>ECB-POLICY-CENTENO-a52f21b9-8975-4dc5-9a21-8c5e8267aa43>ECB-POLICY-RATES-82f6314e-6203-420b-bc8b-70a978546822>ECB-POLICY-KAZIMIR-00b06d9b-4b99-46ce-a2aa-458d8eb2d993>ECB-POLICY-RATES-82f6314e-6203-420b-bc8b-70a978546822>ECB-POLICY-CENTENO-a52f21b9-8975-4dc5-9a21-8c5e8267aa43>ECB-POLICY-RATES-82f6314e-6203-420b-bc8b-70a978546822>ECB's 2% target by around mid-year and a key reason for easing price pressures is the weak economic outlook.

Vujcic argued that the ECB-POLICY-RATES-82f6314e-6203-420b-bc8b-70a978546822>ECB-POLICY-CENTENO-a52f21b9-8975-4dc5-9a21-8c5e8267aa43>ECB-POLICY-RATES-82f6314e-6203-420b-bc8b-70a978546822>ECB-POLICY-KAZIMIR-00b06d9b-4b99-46ce-a2aa-458d8eb2d993>ECB-POLICY-RATES-82f6314e-6203-420b-bc8b-70a978546822>ECB-POLICY-CENTENO-a52f21b9-8975-4dc5-9a21-8c5e8267aa43>ECB-POLICY-RATES-82f6314e-6203-420b-bc8b-70a978546822>ECB had managed to engineer a so-called soft landing, or taming inflation without causing a recession, but there was no significant upturn in growth in sight, raising the risk of economic stagnation.

Industry has been in recession, government investment is weak and private consumption has been especially low as households bolster their savings. A rise in foreign trade income has been among the few bright spots but even that came because of lower imports and not due to higher exports.

(Reporting by Balazs Koranyi; Editing by Tomasz Janowski and Alex Richardson)

Market Pricing of up to Four ECB Rate Cuts This Year Is Reasonable, Vujcic Says

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ECB Rate Cut Expectations: Vujcic Calls Market Predictions Reasonable

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