ECB Policymaker Says Rate Cuts Could Happen in The Next Few Meetings – Europe Market Wrap

Stocks struggled to maintain momentum following another record-breaking session on Wall Street, as a rally in Europe stalled despite policymakers’ dovish comments.

Futures on the S&P 500 and Nasdaq 100 were little changed after the indexes gained more than 1% following an inflation reading that did little to alter traders’ belief that the Federal Reserve will cut interest rates this year. Treasury yields remained unchanged, while bond yields across Europe fell slightly.

Traders held onto Fed rate cut bets for this year, despite US inflation coming in higher than expected on Tuesday. Futures markets are pricing in nearly 70% odds that the central bank will begin easing in June and implement at least three quarter-point cuts by the end of 2024. Policymakers will next meet on March 19-20, and investors will be looking for the Federal Open Market Committee’s quarterly rate forecasts, as well as whether new employment and inflation data have prompted any changes.

ECB’s Villeroy: The ECB is more likely to cut rates in June than April.

Wells Fargo now expects the Fed to start cutting rates in June vs May expected earlier.