Deutsche Bank made an emergency adjustment to its interest rate forecast and now thinks the European Central Bank will cut rates by 1.5% next year

　　As market expectations of an interest rate cut by the European Central Bank next year continue to grow, some institutions are making urgent adjustments to their forecasts, although others believe current market expectations will ultimately prove wrong.

　　Money market pricing suggests traders expect the ECB to cut rates by a total of 150 basis points next year, with the cycle starting in March.

　　Mark Wall, an economist at Deutsche Bank, said: "Given the latest inflation data and the tone of central bankers' comments, we are concerned that we have been too timid. Our outlook for near-term growth and inflation is more pessimistic than the ECB's. The risk now is an earlier and bigger cut in interest rates and a greater ability of the ECB to decouple from the US Federal Reserve. We expect to start cutting interest rates in April next year and reduce them by 150 basis points throughout the year; And there is a significant risk of a rate cut in March."

　　Gareth Isaac, head of multi-sector portfolio management at Invesco, said: "The European economy has been steadily deteriorating over the past 12 months as financial conditions have tightened. I expect the Labour market to weaken next year, providing cover for the ECB to start cutting interest rates aggressively when inflation falls back to target."

　　However, some agencies think this expectation is overly optimistic.

　　Stephanie Niven, portfolio manager at Ninety One, said a euro zone (EARN) rate cut is more likely to come at the end of next year, given that central bankers have been emphasizing expectations of a prolonged period of high fixed interest rates, and European Central Bank President Christine Lagarde has warned, That is, the medium-term outlook for inflation remains highly uncertain. In an interview with Bloomberg TV, he said: "It's interesting to look at all the narratives across Europe, the wobble we've seen in the last three weeks. Europe has cyclical challenges as well as structural challenges, which is why markets really expect the ECB to do something."