---
title: A hawkish cut? As expected, ECB cuts rates by 25bps despite higher inflation projections for 2024 and 2025.
description: "Main rate now at 4.25%, Deposit rate now at 3.75. ECB not pre-committing to any particular rate path. ECB to follow data-dependent, meeting-by-meeting approach.\nThe main surprise of the day is inflation forecasts being revised slightly upwards for 2024 (2.5% vs. 2.3%) and 2025 (2.2% vs. 2%), suggesting that the ECB will maintain a restrictive stance, keeping key rates above the neutral rate for the next 12 to 18 months. \nBond yields have slightly increased across maturities without significant weakness in peripheral rates. \nThe market is now pricing in fewer than two rate cuts for the remainder of the year, aligning with expectations of one rate cut per quarter.\nSource: Bloomberg, HolgerZ"
---

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# [A hawkish cut? As expected, ECB cuts rates by 25bps despite higher inflation projections for 2024 and 2025.](https://blog.syzgroup.com/syz-the-moment/a-hawkish-cut-as-expected-hashtagecb-cuts-rates-by-25bps-despite-higher-hashtaginflation-projections-for-2024-and-2025)

 Written by [Charles-Henry Monchau, CFA, CMT, CAIA](https://blog.syzgroup.com/syz-the-moment/author/charles-henry-monchau) | Jun 6, 2024, 2:42:56 PM

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