Global Daily: Eurozone recovery still ongoing?

As was widely expected, the ECB cut its policy rate yesterday by 25 basis points, bringing the deposit rate to 2.75%. As our ECB-watcher Bas van Geffen notes in his post-meeting comment, incoming data had largely developed as the ECB expected. Data released yesterday indicate that Eurozone GDP had stagnated in Q4, but Lagarde noted that the recovery was “certainly” still ongoing . Importantly, although a 2% neutral rate would be a plausible estimate, we maintain our forecast of a 2.25% terminal rate for now. As we wrote in a publication yesterday, we think that the Eurozone economy will perform somewhat better this year than in 2024, driven by a pickup in consumption. But the economy that hasn't come out of the starting blocks yet.