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Goldman Sachs, BNP Paribas say no more rate cuts by the ECB in 2025
Published by Global Banking and Finance Review
Posted on July 25, 2025
2 min readLast updated: January 22, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on July 25, 2025
2 min readLast updated: January 22, 2026
Goldman Sachs and BNP Paribas forecast no ECB rate cuts in 2025, citing economic resilience and potential EU-U.S. tariff agreements.
By Siddarth S
(Reuters) -Goldman Sachs and BNP Paribas scrapped their forecasts for a September rate cut by the European Central Bank, now expecting no further easing this year after the ECB held rates steady.
"We think the (rate cutting) cycle is over, and the next move is a hike, in Q4 2026," BNP said in a note dated July 24 and pointed to a resilient economy and rising hopes of an EU-U.S. tariff deal.
On Thursday, the ECB held policy rates unchanged at 2% after having cut interest rates eight times since June 2024.
"We are in this wait-and-watch situation," ECB President Christine Lagarde told a press conference, adding that the economy was now in a "good place".
Lagarde's comments suggest "that the Governing Council will likely hold rates unless the outlook deteriorates materially," analysts at Goldman Sachs wrote.
Some analysts interpreted the ECB chief's remarks as somewhat hawkish.
HSBC too reiterated its stance that the ECB is done cutting rates, while J.P. Morgan has pushed its rate-cut forecast to October from an earlier expectation of September.
The outcome of EU-U.S. trade talks remains uncertain but two diplomats with inside information told Reuters a deal that includes a broad 15% tariff on EU goods was likely.
Earlier this month, Trump had threatened to impose 30% tariffs on EU imports starting August 1.
Other brokerages including Morgan Stanley and UBS also signaled growing uncertainty around a September move.
"The risks to that view( a September rate cut) have clearly increased," analysts at Morgan Stanley said in a note. "In case data were to come in stronger than we expect, we think the ECB could extent the current hold into December."
(Reporting by Siddarth S and Akriti Shah in Bengaluru; Editing by Ronojoy Mazumdar)
Goldman Sachs and BNP Paribas have scrapped their forecasts for a September rate cut by the ECB, now expecting no further easing this year.
The ECB held policy rates unchanged at 2% after cutting interest rates eight times since June 2024.
Lagarde stated that the economy is now in a 'good place' and suggested that the Governing Council will likely hold rates unless the outlook deteriorates materially.
The outcome of the EU-U.S. trade talks remains uncertain, but diplomats indicated a deal including a broad 15% tariff on EU goods was likely.
Brokerages like HSBC, J.P. Morgan, Morgan Stanley, and UBS have signaled growing uncertainty around a September rate cut, with some pushing their forecasts back.
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